The Reserve Bank of India (RBI) is likely to announce around Rs 2.5-3 lakh crore as dividend transfer to the government today, sharply higher than what the central bank transferred last year, on account of profits made from its intervention in currency markets to stem the decline in the rupee in FY25, economists have said.
They said that the repo operations by the central bank also likely aided the windfall. Last year, the central bank transferred Rs 2.1 lakh crore to the government.
“The RBI would have made enough profits last fiscal by way of forex operations as well as the repo operations,” said Madhavankutty G Group, the chief economist at Canara Bank.
Every year, the RBI makes an annual payout to the government from the surplus income it earns on investments and valuation changes on its dollar holdings, and the fees it gets from printing currency.
The RBI, after provisioning for bad debt, depreciation of assets, contributions to staff and superannuation fund and other matters, transfers the remaining surplus to the government, as required under the RBI Act.
The surplus transfer or dividend for this year is being keenly watched, as the RBI heavily sold dollars in the market, leading to the expectation of increased income.
The RBI has been a net seller of the dollar since October to defend the rupee from falling sharply against the greenback, which has made the Indian currency least volatile among Asian and global peers.
On a gross basis, the central bank sold dollars worth $371.551 billion between April and February of FY25 and gross purchased $322.685 billion during the period.
Such heightened selling of dollars may have increased the revenue for the central bank. The logic is simple, like in any commercial transaction, the RBI accumulated dollars cheap and sold it when the price rose. The central bank accumulated dollars in the 83-84 range a dollar and sold in the 84-87 range.
The RBI dividend is a major revenue source for the government. As the manager of its finances, the RBI pays a dividend to the government to help from its surplus profit.
The government expects to receive Rs 2.56 lakh crore from the RBI and public sector banks in FY26, finance minister Nirmala Sitharaman said in her Budget speech on February 1.
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