FY25: RBI to transfer Rs. 2.69 lakh crore surplus to the govt
Virendra Pandit
New Delhi: The Reserve Bank of India (RBI) is set to transfer surplus funds of Rs. 2.69 lakh crore to the government, the media reported.
On Friday, the central bank’s Board of Directors approved the transfer of a huge Rs. 2,68,590 crore bonanza to the Government of India for the financial year 2024-25, up 27 percent vis-a-vis Rs. 2,10,874 crores for FY24.
The bumper dividend is expected on the back of gains from US dollar sales (the RBI sold US dollars worth USD 400 billion in FY25), higher earnings on foreign exchange assets, and decent earnings from liquidity infusion operations via variable rate repo auctions, the reports said.
The dividend declared is higher than the Rs. 2.56 lakh crore the government expected from RBI and public sector banks put together in the Union Budget for FY26. Market experts had estimated that the dividend could be in the Rs. 2.50 and Rs. 3.50 lakh crore range.
The huge dividend came even as the Contingent Risk Buffer (CRB) under the revised Economic Capital Framework (ECF) was increased to 7.50 percent of the RBI’s balance sheet size for FY25 from 6.50 percent for FY24.
According to estimates, the dividend would have been higher up to Rs. 3.50 lakh crore without the increase in CRB. This buffer is made from RBI’s economic capital to cover monetary, fiscal stability, credit and operation risks.
This dividend will add to the banking system’s already surplus liquidity. To infuse liquidity, the RBI may refrain from conducting open market purchases (OMOS) of Government Securities (G-Secs).
The transferable surplus for the year (2024-25) has been arrived at on the basis of the revised ECF as approved by the RBI Board in its May 15 meeting.
The RBI noted that the revised ECF provides the Board with the requisite flexibility year-on-year in maintaining risk buffers, considering the prevailing macroeconomic and other factors, while also ensuring the needed inter-temporal smoothening of the surplus transfer to the government.
