The Reserve Bank of India’s Central Board is convening to conclude the transfer of surplus funds to the government under the revised Economic Capital Framework. Economists predict the dividend to exceed last year’s record payout of Rs 2.69 lakh crore, with estimates ranging between Rs 2.8 lakh crore and Rs 3.3 lakh crore by analysts from Bank of Baroda and Emkay. This windfall non-tax revenue is expected to bolster government finances, aiding in managing the fiscal deficit amidst global economic uncertainties without the necessity for increased market borrowing.
In the Union Budget for 2026-27, the government has projected dividends of Rs 3.16 lakh crore from state-owned companies and surplus transfers from the central bank. Last year, the RBI transferred Rs 2.68 lakh crore, marking a 27% increase from the previous year. Madhavi Arora, chief economist at Emkay Global Financial Services, anticipates this year’s RBI dividend to range from Rs 2.8 trillion to Rs 3.3 trillion, influenced by factors like higher interest income and a potentially reduced buffer requirement compared to the previous year.
Bank of Baroda’s chief economist, Madan Sabnavis, foresees the dividend for this year to be around Rs 3-3.2 trillion, primarily due to a decrease in the contingency buffer requirement. The surplus drivers for 2025-26 are expected to differ from the previous year, with the deployment of foreign exchange reserves significantly impacting the RBI’s payout in 2024-25. Under the RBI’s Economic Capital Framework, the central bank must maintain its Contingent Risk Buffer within the 4.5-7.5% range.
The RBI’s Central Board had raised the Contingent Risk Buffer to 7.5% in FY25 from 6.5% in FY24. Sabnavis highlighted that the surplus this year is likely to stem more from adjustments in the contingency buffer, potentially leading to an increase of around Rs 50,000 crore compared to last year’s payout. The deployment of forex reserves in treasuries, which boosted earnings in the previous year, may not have the same impact this time, according to Sabnavis.
