RBI's Rs 2.7 lakh crore bumper dividend to ease India's fiscal position: SBI
The massive surplus transfer far exceeds the Rs 2.56 lakh crore that finance minister Nirmala Sitharaman had announced during the budget for FY26 from the RBI and public sector financial institutions combined. The unexpected windfall will likely offer the government greater financial flexibility as it steers the world's fourth-largest economy.
'We expect the fiscal deficit to ease by 20 basis points from the budgeted level to 4.2 per cent of GDP.
Alternatively, it will open up for additional spending for around Rs 70,000 crores, other things remaining unchanged,' SBI's Ecowrap report stated.
The RBI announced a dividend of Rs 2.69 lakh crore for the financial year 2024–25, marking a 27.4% increase from the Rs 2.11 lakh crore transferred in FY24. This increase follows a revision in the central bank's contingency risk buffer range which now falls between 4.5% and 7.5% of the balance sheet, compared to the earlier 5.5%–6.5% range.
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The bumper payout was fuelled by 'robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income,' according to the SBI report, quoted by PTI.
It also noted that the RBI was the largest seller of foreign exchange reserves among Asian central banks in January.
Foreign exchange reserves reached a peak of $704 billion in September 2024, with the RBI actively intervening in currency markets by offloading substantial amounts of dollars to stabilise the rupee.
The report added that RBI's surplus generation was influenced by its Liquidity Adjustment Facility (LAF) operations and earnings from domestic and foreign securities. From June 3 to December 13, 2024, the central bank remained in absorption mode under the LAF, contributing to operational expenses.
However, liquidity turned to injection mode after mid-December, and system liquidity stood at a surplus of Rs 1.2 lakh crore as of March 31, 2025. Average liquidity from December 16, 2024 to March 28, 2025 was Rs 1.7 lakh crore.
SBI expects this trend to continue into FY26, on the back of factors like OMO purchase, RBI's dividend transfer, and a BOP surplus of around $25–30 billion.
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