RBI set to transfer ₹2.5–3.5 lakh crore dividend to centre

The RBI is expected to transfer over ₹2.5 lakh crore to the Centre as surplus for FY25, significantly higher than last year’s record payout. Economists attribute this to the central bank’s dollar sales and interest income from liquidity operations.

The central bank’s surplus transfer to the government for FY25 is expected to exceed ₹2.5 lakh crore, according to economists and analysts. This would be nearly 20% higher than last year’s record dividend of ₹2.1 lakh crore, comfortably surpassing the Centre’s budgeted estimates for FY26. A larger-than-expected payout would ease pressure on the government to increase borrowing, especially in a year where growth is likely to be state-driven.

Economists attribute the anticipated windfall to the Reserve Bank of India’s (RBI) substantial dollar sales to stabilise the rupee and the interest income from its liquidity operations. An international banking group estimates the payout could go as high as ₹3.5 lakh crore.

The RBI, which acts as the government’s debt manager, is likely to announce the FY25 surplus transfer in late May. Last year’s payout of ₹2.1 lakh crore had doubled market expectations. This year, the government has estimated a dividend of ₹2.2 lakh crore in its budget.

“These funds could help the Centre shrink the fiscal gap. Plus, spending from the government would pump liquidity into the banking system.” According to Madhavi Arora, chief economist at Emkay Global Financial Services, “This dividend gives GOI room to correct their fiscal deficit, especially since there has been a drop in tax collection due to the slowdown in the economy.” She added, “There will be very high liquidity that would be coming via this route, which would be good for the bond market, pushing down yields especially of the shorter tenured bonds.” Emkay expects a dividend of ₹2.8–3 lakh crore.

Dhiraj Nim, economist and FX strategist at ANZ Banking Group, said, “The RBI undertook significant dollar sales to support the rupee and maintain exchange rate stability,” adding that these efforts, along with lending to banks during a liquidity crunch, should contribute to a substantial surplus payout.