FPJ News Service mumbai

The 616th meeting of the central board of directors of Reserve Bank of India (RBI) on Friday approved a whopping dividend of Rs 2.69 lakh crore for FY25 to the Centre. The dividend approved is 27.4% more than the payout in 2023-24. The apex bank had transferred Rs 2.1 lakh crore as dividend to the government for FY24. The payout was Rs 87,416 crore for FY23.

The dividend transfer will significantly ease pressure on the government’s balance sheet as the payout is 27.4% more than the dividend paid in 2023-24. The divided transfer will help the government in its tasks to narrow the country’s fiscal deficit to 4.4% for the current fiscal year. The higher payout is attributed to higher dollar sales and foreign exchange gains.  

The board meeting presided over by RBI Governor Sanjay Malhotra reviewed the global and domestic economic scenario, including risks to the outlook. The board also discussed the working of the RBI during the year April 2024–March 2025, and approved the apex bank’s annual report and financial statements for the year 2024-25.

The transferable surplus for the year (2024-25) has been arrived at on the basis of the revised Economic Capital Framework as approved by the central board in its meeting held on May 15, 2025. The revised framework stipulates that the risk provisioning under the Contingent Risk Buffer be maintained within a range of 7.50 to 4.50 per cent of the RBI’s balance sheet.

During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of Covid-19 pandemic, the Board had decided to maintain the CRB at 5.50% of the apex bank’s balance sheet size to support growth and overall economic activity. The CRB was increased to 6.00% for FY 2022-23 and to 6.50% for FY 2023-24. Based on the revised ECF, and taking into consideration the macroeconomic assessment, the central board decided to further increase the CRB to 7.50%..

Jalan panel recommendations stood test of time, may only need minor tweaks

RBI's dividend transfer to the government based on Bimal Jalan committee recommendations has "stood the test of time" and only some tweaking may be required for the coming five years, a government source said on Friday.

 The source said that at a time when the economy is seeing a steady, consistent growth, some alteration in dividend transfer formula may be required to suggest what should be the set formula for the next five years. The source said the dividend transfer so far has been calculated based on the Bimal Jalan-panel's ECF recommendations and certainly the time to review the framework has come.