The Reserve Bank of India (RBI) has made a record dividend payout of nearly Rs 2.7 trillion to the government, surpassing expectations. According to a report by the State Bank of India (SBI), this surplus transfer was made possible due to robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income. The RBI’s active participation in the foreign exchange market, particularly its aggressive dollar sales, played a significant role in stabilizing the rupee and generating substantial foreign exchange gains.
In the current financial year, the RBI sold a massive USD 371.6 billion, much higher than the USD 153 billion recorded in the previous year. This large-scale selling helped the central bank book substantial foreign exchange gains, which added to the surplus. Additionally, the RBI earned more income from its rupee securities, with its holdings rising by Rs 1.95 lakh crore to Rs 15.6 lakh crore as of March 2025.
The SBI report highlighted the RBI’s prudent approach in maintaining financial stability, citing its decision to increase its risk buffer, known as the Contingent Risk Buffer (CRB). This buffer acts as a safeguard against future risks and was maintained within a range of 7.5 per cent to 4.5 per cent of the RBI’s balance sheet. The transferable surplus was calculated under the revised Economic Capital Framework (ECF), approved by the RBI’s Central Board.
This large payout is a windfall for the government, with the actual amount exceeding the budget estimates. The Union Budget for 2025-26 had projected a total dividend income of Rs 2.56 lakh crore from the RBI and public sector financial institutions. The RBI’s record dividend payout is a testament to its effective management of the country’s foreign exchange reserves and its commitment to maintaining financial stability. The payout is expected to provide a significant boost to the government’s finances, allowing it to meet its fiscal targets and invest in various development projects. Overall, the RBI’s proactive approach has yielded positive results, and the government is likely to benefit from this windfall in the coming years.