RBI board clears record surplus transfer of Rs 2.69 lakh crore to Centre for 2024-25

“Based on the revised ECF, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.5 per cent. The Board thereafter approved the transfer of

Rs 2,68,590.07 crore as surplus to the Central Government for the accounting year 2024-25,” the RBI said in a release issued after the board meeting.

The dividend for 2024-25 is 27 per cent higher than the Rs 2.11 lakh crore surplus transferred by the RBI during the accounting year 2023-24. The Union Budget for 2025-26 had projected a dividend income of Rs 2.56 lakh crore cumulatively from the RBI and public sector financial institutions.

The record dividend payout for 2024-25 was likely on account of robust earnings of the RBI led by large exchange gains from its dollar sales to support the falling rupee and higher revenue earned on foreign assets due to rise in interest rates in the international markets.

“While details have not yet been released, income has likely been supported by earnings on foreign exchange transactions,” said Gaura Sengupta, chief economist, IDFC FIRST Bank.

The RBI’s gross dollar sales surged to $399 billion in FY25 from $153 billion in FY24. The pick-up in gross dollar sales was led by Balance of Payments turning negative in FY25, due to slowdown in capital inflows, she said.

The RBI’s foreign currency assets rose by 1.3 per cent year-on-year in FY25 (till March 28), led by revaluation gains. As a percentage of total assets, foreign currency assets account for 64.4 per cent share and government securities 20.7 per cent share. Around 85.6 per cent of foreign currency assets are held as securities and the rest as deposits with other central banks and the Bank of International Settlements (BIS), Sengupta said.

However, the transfer of Rs 2.69 lakh crore was lower than the market expectations of up to Rs 3 lakh crore, which was based on a CRB range of 5.5-6.5 per cent.

The revised framework has stipulated a CRB range of 4.5-7.5 per cent.

The increase in Contingent Risk Buffer to 7.5 per cent for 2024-25 reduced the dividend.

The RBI’s CRB is the country’s savings for a ‘rainy day’ (a financial stability crisis) which the central bank consciously maintained in view of its role as Lender of Last Resort (LoLR). It is the component of the RBI’s economic capital required to cover its monetary and financial stability, credit and operational risks.

“This is a prudent move given rising upward pressure on US treasury (UST) yields which could increase revaluation loss on forex exchange (FX) reserves. Upward pressure on UST yields could persist due to US fiscal risk concerns,” Sengupta said.

According to Soumya Kanti Ghosh, group chief economic advisor, State Bank of India, a bumper dividend transfer of Rs 2.7 lakh crore will ease the government’s fiscal position.

“We expect the fiscal deficit to ease by around 20 basis points (bps) from the budgeted level to 4.2 per cent of GDP,” Ghosh said.

Alternatively, it will open up for additional spending for around Rs 70,000 crore, other things remaining unchanged, he said.