RBI board may approve ₹2.8-3.3 trillion surplus transfer on Friday

Economists expect the RBI's FY26 surplus transfer to the government to exceed last year's record Rs 2.7 trillion dividend payout

The central board of the Reserve Bank of India (RBI) is scheduled to meet on Friday to decide on the surplus transfer to the government for FY26, with economists expecting the payout to exceed last year’s record dividend of ₹2.7 trillion.

 

Economists expect the dividend transfer to be in the range of ₹2.8 trillion to ₹3.3 trillion, supported by higher interest income and the possibility of lower provisioning towards contingency reserves.

 

“We expect the RBI dividend to come in the range of ₹2.8 trillion to ₹3.3 trillion this year, depending on the level of capital they use. Higher interest income and a potentially lower buffer requirement could support a larger payout compared to last year’s ₹2.7 trillion dividend,” said Madhavi Arora, chief economist at Emkay Global Financial Services.

 

 

Madan Sabnavis, chief economist at Bank of Baroda, said the dividend could come in at ₹3 trillion to ₹3.2 trillion this year, mainly due to the contingency buffer requirement. He said the drivers of the surplus this year would differ from FY25, when higher earnings from deployment of foreign exchange reserves had boosted the payout.

 

“I am expecting something close to ₹3 trillion-Rs 3.2 trillion. Last year, it was ₹2.7 trillion, so around ₹50,000 crore more. This time it’s going to be more on account of the contingency buffer, which could be lowered,” Sabnavis said.

 

Under the RBI’s Economic Capital Framework, the central bank is required to maintain the Contingent Risk Buffer (CRB) within a range of 4.5 per cent to 7.5 per cent of its balance sheet. The central board of the RBI had raised the CRB to 7.5 per cent in FY25 from 6.5 per cent last year.

 

“It’s currently at 7.5 per cent, while the range is 4.5 per cent to 7.5 per cent. If they lower it and decide to keep it at 7 per cent, they could release more money. Last year they got a lot of payments on their forex reserves deployment because reserves had risen and they were invested in treasuries. That kind of thing may not be there this time,” he added.

 

A report by IDFC FIRST Bank estimated the RBI dividend at around ₹2.7 trillion, supported by interest income on foreign securities and rupee securities, although gains from foreign exchange transactions are expected to be lower than last year.

 

The report added that provisioning requirements are likely to increase due to a sharp expansion in the RBI’s balance sheet during FY26, driven by open market operations, revaluation gains on foreign currency reserves and higher gold prices.

 

The Union Budget for FY27 budgeted dividend income from the RBI and public sector financial institutions at ₹3.2 trillion.