RBI To Pay Rs 2.69 Lakh Crore Dividend To Government, Below Market Expectation

The central bank annually pays out a surplus to the government, drawn from income generated through investments, valuation gains on its dollar reserves, and fees from printing currency. This amount is determined after accounting for provisioning for bad loans, asset depreciation, employee benefits, and other statutory expenses under the RBI Act.

The RBI dividend/surplus is an important source of revenue for the government especially as it provides a buffer to make up for a miss in taxes or disinvestment receipts, or higher-than-budgeted expenditure in the fiscal. It helps the government boost its fiscal position.

Murthy Nagarajan, head, fixed Income at Tata Asset Management said, “The RBI dividend of Rs 2.69 lakh is lower than market expectation of Rs 3 lakh crore. This is due to RBI revising its contingent liquidity buffer to 4.5 to 7.5 per cent. The RBI board has increased its contingent reserve buffer to 7.5 per cent, due to which this amount is lower than the Rs 3 lakh crore which was the market expectation. This is a disappointment for the market, and we can expect some profit booking after the steep rally which we saw in the last 10 days.”

The RBI transfer to the government is governed by the revised Economic Capital Framework (ECF) approved by the Central Board in its 616th meeting held on May 15, 2025 under the chairmanship of RBI Governor Sanjay Malhotra. The revised framework stipulates that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 7.50 to 4.50 per cent of the RBI’s balance sheet.

For FY25, the CRB has been increased to the upper limit of 7.5 per cent, reflecting improved macroeconomic stability and financial resilience. This transfer marks a sharp increase from the CRB levels maintained during the pandemic years, when the buffer was kept at 5.5 per cent to support growth. The CRB was gradually raised to 6 per cent in FY23 and to 6.5 per cent in FY24 before this year’s upward revision.

“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 and approved the transfer of ₹2,68,590.07 crore as surplus to the Central government for the accounting year 2024-25,” the RBI said in a statement.

In the Union Budget speech on February 1, finance minister Nirmala Sitharaman said the government expected to receive dividends of Rs 2.56 lakh crore in FY26 from the RBI and public sector banks.