Mumbai: Reserve Bank of India's (RBI) surplus transfer to North Block for the last fiscal could be as high as ₹3 lakh crore, much higher than that estimated a month ago. Robust gross dollar sales, higher foreign exchange gains, and anticipated increases in interest income should help boost the payout, recent reports by economists said. The new estimate of ₹3 lakh crore is 50% more than the ₹2.1 lakh crore paid in the previous fiscal year.
Initial estimates for FY25 worked with the ballpark of around ₹2-₹2.5 lakh crore, showed an ET poll of 10 institutions published April 14.
Only ANZ Banking Group had estimated a transfer of ₹3.25 lakh crore. The government had estimated a dividend of ₹2.3 lakh crore in its budget.
"We estimate an RBI dividend of ₹2.6 lakh to ₹3 lakh crore, depending on the level of provisioning. The higher dividend creates a fiscal space of 0.1% to 0.2% of GDP," Gaura Sen Gupta, chief economist at IDFC First Bank, said in a report on Wednesday.
Also Read: RBI likely to pay out a bumper dividend, again
Economists are raising estimated payouts as the transfer time-window nears. "RBI's FY25 dividend payout to the government is projected to increase, fuelled by higher income from forex reserve deployments due to elevated US treasury yields," a report by the ICICI Research team said. "This boost is further supported by strong commissions from forex operations and interest income on government securities."
The dividend could help the Centre shrink the fiscal gap. Plus, spending from the government would pump liquidity into the banking system, and the liquidity would be visible from early July, economists said
"Gross dollar sales rose to $371.6 billion in FY25, till February versus $153 billion in FY24. Meanwhile, decline in GSec yields has resulted in MTM (market to market) gains on RBI's holdings of rupee securities. In FY25, RBI's holdings of rupee securities increased by ₹1.95 lakh crore to ₹15.6 lakh crore as of March 2025," according to IDFC First Bank.
Also Read: RBI forex income expected to rise, lift payout to government
The RBI was the top seller of foreign exchange reserves in January among other Asian central banks. Foreign exchange reserves peaked in September 2024 to $704 billion and the RBI is estimated to have sold over $125 billion since then, according to estimates by Nomura and DBS Bank.
"The RBI undertook significant dollar sales to support the rupee and maintain exchange rate stability. Additionally, tight systemic liquidity prompted the RBI to extend funds to banks, thereby contributing to its interest income. Therefore, the dividend payout for FY25 is likely to be large," said Dhiraj Nim, economist and FX strategist, ANZ Banking Group. Contingency provisions are expected to be similar to last year, or higher. Provisions stood at ₹42,800 crore and is expected to be between ₹40,000 crore and ₹80,000 crore, according to IDFC First Bank.
The surplus amount of the dividend is arrived at on the basis of the Economic Capital Framework (ECF) adopted by the Reserve Bank on August 26, 2019 as per recommendations of the Expert Committee to Review the ECF chaired by former governor Bimal Jalan. Committee had recommended that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5% to 5.5% of the RBI's balance sheet.
Initial estimates for FY25 worked with the ballpark of around ₹2-₹2.5 lakh crore, showed an ET poll of 10 institutions published April 14.
Only ANZ Banking Group had estimated a transfer of ₹3.25 lakh crore. The government had estimated a dividend of ₹2.3 lakh crore in its budget.
"We estimate an RBI dividend of ₹2.6 lakh to ₹3 lakh crore, depending on the level of provisioning. The higher dividend creates a fiscal space of 0.1% to 0.2% of GDP," Gaura Sen Gupta, chief economist at IDFC First Bank, said in a report on Wednesday.
Also Read: RBI likely to pay out a bumper dividend, again
Economists are raising estimated payouts as the transfer time-window nears. "RBI's FY25 dividend payout to the government is projected to increase, fuelled by higher income from forex reserve deployments due to elevated US treasury yields," a report by the ICICI Research team said. "This boost is further supported by strong commissions from forex operations and interest income on government securities."
The dividend could help the Centre shrink the fiscal gap. Plus, spending from the government would pump liquidity into the banking system, and the liquidity would be visible from early July, economists said
"Gross dollar sales rose to $371.6 billion in FY25, till February versus $153 billion in FY24. Meanwhile, decline in GSec yields has resulted in MTM (market to market) gains on RBI's holdings of rupee securities. In FY25, RBI's holdings of rupee securities increased by ₹1.95 lakh crore to ₹15.6 lakh crore as of March 2025," according to IDFC First Bank.
Also Read: RBI forex income expected to rise, lift payout to government
The RBI was the top seller of foreign exchange reserves in January among other Asian central banks. Foreign exchange reserves peaked in September 2024 to $704 billion and the RBI is estimated to have sold over $125 billion since then, according to estimates by Nomura and DBS Bank.
"The RBI undertook significant dollar sales to support the rupee and maintain exchange rate stability. Additionally, tight systemic liquidity prompted the RBI to extend funds to banks, thereby contributing to its interest income. Therefore, the dividend payout for FY25 is likely to be large," said Dhiraj Nim, economist and FX strategist, ANZ Banking Group. Contingency provisions are expected to be similar to last year, or higher. Provisions stood at ₹42,800 crore and is expected to be between ₹40,000 crore and ₹80,000 crore, according to IDFC First Bank.
The surplus amount of the dividend is arrived at on the basis of the Economic Capital Framework (ECF) adopted by the Reserve Bank on August 26, 2019 as per recommendations of the Expert Committee to Review the ECF chaired by former governor Bimal Jalan. Committee had recommended that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5% to 5.5% of the RBI's balance sheet.
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