Mumbai, May 23 (PTI) The Reserve Bank on Friday announced a record Rs 2.69 lakh crore dividend to the government for FY25, 27.4 per cent higher than 2023-24, helping the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan.

The decision on the dividend payout was taken at the 616th meeting of the Central Board of Directors of Reserve Bank of India held here under the Chairmanship of Governor Sanjay Malhotra.

The central bank had transferred Rs 2.1 lakh crore dividend to the government for the fiscal 2023-24. The payout was Rs 87,416 crore for 2022-23.

In a statement, the RBI said the transferable surplus for the year (2024-25) has been arrived at on the basis of the revised Economic Capital Framework (ECF) as approved by the Central Board in its meeting held on May 15, 2025.

The revised framework stipulates that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 7.50 to 4.50 per cent of the RBI’s balance sheet.

During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of the Covid-19 pandemic, the Board had decided to maintain the Contingent Risk Buffer (CRB) at 5.50 per cent of the Reserve Bank’s Balance Sheet size to support growth and overall economic activity.

The CRB was increased to 6 per cent for FY2022-23 and to 6.50 per cent for FY 2023-24.

Based on the revised ECF, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent, the RBI said.

"The Board thereafter approved the transfer of Rs 2,68,590.07 crore as surplus to the Central Government for the accounting year 2024-25," it said.

The government has estimated Rs 2.56 lakh crore as dividend/surplus for FY26 from the Reserve Bank of India, nationalised banks and financial institutions.

The government aims to bring down the fiscal deficit during 2025-26 to 4.4 per cent of the GDP from 4.8 per cent estimated for the preceding fiscal.

Commenting on the RBI's decision, Aditi Nayar, Chief Economist with Icra, surplus transfer is about Rs 0.4-0.5 lakh crore (equivalent to 11-14 bps of GDP), higher than the amount that was likely assumed in the FY26 Union Budget, implying an equivalent upside to non-tax revenues, which would provide some buffer to make up for a miss in taxes or disinvestment receipts, or higher-than-budgeted expenditure in the fiscal. "This provides some comfort on the fiscal front," she said.

The Board also reviewed the global and domestic economic scenario, including risks to the outlook. It also discussed the working of the Reserve Bank during the year April 2024 – March 2025 and approved the central bank’s Annual Report and Financial Statements for the year 2024-25.

Giving details about the revised ECF, the RBI said the computation of market risk buffer requirement to adopt an integrated approach, wherein the off-balance sheet portfolio is also reckoned, together with the on-balance sheet portfolio.

The computation of market risk buffer requirement may also include investments in Foreign Currency Assets in minor currencies, it said.

Further, with respect to the surplus distribution policy, any available equity in excess of 7.5 per cent of balance sheet (B/S) size (after considering shortfall in market risk buffers, if any) may be written back from the Contingency Fund to income.

In case, the available equity is below the lower bound of its requirement, no surplus will be transferred to the government till at least the minimum level of Required Realised Equity is achieved, according to the revised ECF. PTI NKD CS NKD BAL BAL

Surplus transfer policy: revised capital framework ties dividend distribution to contingent risk buffers and required realised equity. Reserve Bank dividend was set under a revised Economic Capital Framework which raised the Contingent Risk Buffer to 7.50% of the balance sheet and authorised transfer of surplus only after required equity thresholds are met. The framework permits writing back any equity above 7.5% from the Contingency Fund to income for distribution and mandates no surplus transfer if available equity is below the minimum Required Realised Equity. The market risk buffer computation now uses an integrated approach including off balance sheet portfolios and may include minor currency foreign assets.