In a landmark decision, the Reserve Bank of India (RBI) on Friday approved a surplus transfer of Rs 2.6 lakh crore to the Union government for the financial year 2024-25 — the highest annual dividend ever paid by the central bank.
According to The Indian Express, the surplus, which represents the central bank’s profit, is transferred each year to the government as a dividend and constitutes a significant component of its revenue.
This year’s record transfer is expected to give a strong boost to the Centre’s finances amid global economic uncertainty and ongoing trade talks with the United States, which may impact future customs duty collections, Moneycontrol reported.
In addition to the surplus payout, the RBI board also announced an increase in the Contingency Risk Buffer (CRB) — a safety fund reserved for unforeseen economic shocks — raising it to 7.5% of its balance sheet.
The CRB had been kept at 5.5% between 2018-19 and 2021-22 to support the economy through difficult periods, including the COVID-19 crisis. As conditions improved, the buffer was gradually raised to 6% in 2022-23 and then to 6.5% in 2023-24.
The latest hike to 7.5% reflects the RBI’s cautious stance in preparing for potential risks while maintaining confidence in the country’s economic trajectory.