The Reserve Bank of India (RBI) on Friday announced a record dividend payout of Rs 2.69 lakh crore to the central government for the financial year 2024–25, marking a 27.4% increase from the Rs 2.1 lakh crore transferred in FY24. The announcement came after the 616th meeting of the RBI's Central Board of Directors, chaired by Governor Sanjay Malhotra.

This unprecedented surplus transfer is expected to provide a significant fiscal cushion for the government amid mounting expenditure pressures, including higher defence spending linked to the ongoing conflict with Pakistan and the impact of US-imposed tariffs.

The dividend for FY25 was calculated based on the revised Economic Capital Framework (ECF) approved by the Central Board on May 15, 2025. The updated framework requires the Contingent Risk Buffer (CRB) — the central bank’s provision for unforeseen risks — to be maintained between 5.5% and 7.5% of the RBI's balance sheet. Reflecting improved macroeconomic stability, the Board decided to raise the CRB to 7.5% for FY25, up from 6.5% in FY24 and 6% in FY23.

According to the RBI, the transferable surplus of Rs 2,68,590.07 crore was approved after considering the macroeconomic environment and applying the revised ECF methodology, which now includes an integrated assessment of both on-balance and off-balance sheet market risks, as well as foreign currency assets in minor currencies.

The central government had earlier projected a total dividend/surplus income of Rs 2.56 lakh crore for FY26 from the RBI, nationalised banks, and financial institutions. This higher-than-expected transfer provides a notable boost to non-tax revenues and offers a fiscal buffer, potentially helping the government meet targets despite possible shortfalls in tax collections, disinvestment proceeds, or unexpected spending requirements.

Aditi Nayar, Chief Economist at ICRA, noted that the surplus transfer is around Rs 40,000–Rs 50,000 crore above the assumed figure in the FY26 Union Budget—equivalent to 11–14 basis points of GDP. "This provides some comfort on the fiscal front," she said.

The RBI Board also reviewed domestic and global economic developments, assessed potential risks to the outlook, and approved the central bank’s Annual Report and Financial Statements for the year ending March 2025.

As per the revised surplus distribution policy, any equity beyond the 7.5% threshold of the balance sheet (after accounting for market risk buffer shortfalls) may be written back from the Contingency Fund into income. However, if the available equity falls below the minimum requirement, no surplus will be transferred to the government until the shortfall is addressed.