RBI Surplus Transfer to Government

RBI Surplus Transfer to Government : Recently, the Reserve Bank of India (RBI) announced a record surplus transfer of ₹2.69 lakh crore to the Central Government for the fiscal year 2024–25 (FY25).

o This marks the highest-ever dividend payout by the central bank, significantly exceeding all previous records.

• Key Highlights: A 27.4% increase from ₹2.1 lakh crore in FY24 and significantly higher than ₹87,416 crore in FY23.

o Finalised during the 616th meeting of the Central Board of Directors.

o The Board assessed global and domestic growth and inflation risks before determining the dividend.

o Economic Capital Framework (ECF) :Based on the revised ECF with the Contingent Risk Buffer (CRB) raised to 7.5% of the RBI’s balance sheet—the upper limit of the 4.5–7.5% range.

• Sources of Surplus: Returns on foreign exchange reserves and investments

o Valuation gains from currency movements

o Income from currency issuance and other operations

• Fiscal Impact: Boosts the Centre’s efforts to meet the fiscal deficit target of 4.4% of GDP.