The Reserve Bank of India (RBI) Central Board is meeting on Friday to finalise its transfer of surplus funds to the government under the revised Economic Capital Framework, with economists estimating the dividend to surpass last year’s record payout of Rs 2.69 lakh crore.
Analysts from Bank of Baroda and Emkay estimate the dividend to range Rs 2.8 lakh crore and Rs 3.3 lakh crore.
The windfall non-tax revenue will provide a major boost to Government finances that will help to keep the fiscal deficit in check amid global economic uncertainties without the need for increased market borrowing.
In the Union Budget for 2026-27, the government has estimated Rs 3.16 lakh crore in dividends from state-owned companies and surplus transfers from the central bank. Last year, the RBI transferred Rs 2.68 lakh crore, which was 27 per cent higher than the previous year.
“We expect the RBI dividend to come in the range of Rs 2.8 trillion to Rs 3.3 trillion this year, depending on the level of capital they use. Higher interest income and a potentially lower buffer requirement could support a larger payout compared to last year’s Rs 2.7 trillion dividend,” said Madhavi Arora, chief economist at Emkay Global Financial Services.
Madan Sabnavis, chief economist at Bank of Baroda, expects the dividend to be at Rs 3-3.2 trillion this year, mainly due to a lowering of the contingency buffer requirement. He said the drivers of the surplus for 2025-26 would differ from2024-25 , when higher earnings from deployment of foreign exchange reserves resulted in a sharp rise in the RBI’s payout.
“Last year, the payout was Rs 2.7 trillion, so this year will be around Rs 50,000 crore more. This time the surplus is going to be more on account of the contingency buffer, which could be lowered,” Sabnavis explained.
Under the RBI’s Economic Capital Framework, the central bank is required to maintain its Contingent Risk Buffer in the 4.5-7.5 per cent range. The Central Board of the RBI went in for a hike in the CRB to 7.5 per cent in FY25 from 6.5 per cent in FY24.
“The RBI’s contingent risk buffer is currently at 7.5 per cent, while its range is 4.5 per cent to 7.5 per cent. If they lower it and decide to keep it at 7 per cent, they could release more money. Last year the RBI got a lot of payments on its forex reserves deployment because reserves had risen and they were invested in treasuries. That kind of thing may not be there this time,” Fadnavis added.
