Mumbai, May 22: The Central Board of the Reserve Bank of India (RBI) is convening on Friday to finalize the transfer of surplus funds to the government under the revised economic capital framework. Economists predict that this year’s dividend will surpass last year’s record payment of ₹2.69 lakh crore.
Analysts from Bank of Baroda and brokerage firm MK Global estimate that the dividend will range between ₹2.8 lakh crore and ₹3.3 lakh crore.
This unexpected increase in non-tax revenue will bolster the government’s finances, helping to maintain fiscal deficit control without relying more on market borrowings amid global economic uncertainties.
In the budget for the fiscal year 2026-27, the government projected a dividend of ₹3.16 lakh crore from public sector companies and the central bank. Last year, the RBI contributed ₹2.68 lakh crore as dividend to the government, marking a 27% increase from the previous year.
Madhavi Arora, Chief Economist at MK Global Financial Services, stated, “We expect the RBI’s dividend this year to be between ₹2.8 lakh crore and ₹3.3 lakh crore, depending on the level of capital utilization. Higher interest income and potentially lower buffer requirements could facilitate a larger dividend compared to last year’s ₹2.7 lakh crore.”
Madan Sabnavis, Chief Economist at Bank of Baroda, anticipates that this year’s dividend will be between ₹3 lakh crore and ₹3.2 lakh crore, primarily due to a reduction in contingency buffer requirements. He noted that the factors influencing the surplus for 2025-26 will differ from those of 2024-25, when the RBI saw significant growth in dividends due to increased income from foreign exchange reserves.
Sabnavis explained, “Last year’s dividend was ₹2.7 lakh crore, so this year it will be approximately ₹50,000 crore more. The surplus will be higher this time due to the reduction in the contingency buffer.”
The contingency buffer refers to the fund that the RBI uses to cover monetary policy shocks, credit risk, and depreciation in securities. Its size typically ranges between 4.5% to 7.5% of the RBI’s balance sheet.
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