Budget 2026| Govt budgets dividend at Rs 3.16 lakh crore from RBI and state-run banks in FY27

Dividend

• Government expects Rs 2-3 lakh crore dividend from RBI and PSBs in FY27
• Higher dividend aided by strong PSB balance sheets and RBI's forex operations
• Dividends aid government in managing deficit and funding capital projects.

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The Centre expects to receive Rs 3.16 lakh crore from the Reserve Bank of India and public sector banks in FY27, finance minister Nirmala Sitharaman said in her Budget speech on February 1.

The dividend payout for the year is higher than last year’s when RBI gave the government Rs 2.68 lakh crore, double the total dividend Budgeted for FY25.

The RBI dividend is a major revenue source for the government. As the manager of its finances, every year, the RBI pays a dividend to government to help from its surplus profit.

In the current year, the RBI dividend has helped keep the fiscal deficit in check despite a decline in nominal growth and a faster pick-up in revenue expenditure.

According to a Moneycontrol poll of economists, treasury heads, and market participants showed that government is expected to budget Rs 2-3 lakh crore as dividend income from the Reserve Bank of India (RBI) and public sector banks (PSBs) in the Union Budget 2026, higher than the Rs 2.56 lakh crore estimated in the previous budget.

The higher dividend projection is likely to be supported by the strong balance sheets of public sector banks and heightened volatility in currency markets, which has resulted in heavy dollar sales by the RBI, boosting its surplus income, poll respondents said.

The dividend estimate to be made in Budget 2026 will accrue in FY27, in line with the government’s accounting framework. The dividend projected in the earlier budget will be realised after the end of the current financial year, as banks typically declare and transfer dividends after finalising their annual results. The RBI, meanwhile, generally transfers its surplus to the government in May.

In May 2025, the central bank paid a record Rs 2.69 lakh crore dividend to the government, reflecting higher income from foreign exchange operations amid global market volatility.

Dividend transfers from the RBI and PSBs have emerged as a key source of non-tax revenue for the government in recent years, helping provide fiscal headroom even as capital expenditure remains a priority.