RBI dividend: What contributed to record ₹2.7 trillion transfer? What does it mean for govt? — All you need to know

The Reserve Bank of India's dividend payout of nearly ₹2.7 trillion to the government was due to the high gross dollar sales, foreign exchange gains, and a consistent increase in interest income, according to a report by the State Bank of India (SBI).

“This surplus payout is driven by robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income,” ANI quoted the SBI report.

Participation in foreign exchange market

The significant surplus in the dividend payout was primarily due to the active participation of the central bank in the foreign exchange market. Notably, the RBI was the biggest seller of foreign exchange reserves among Asian central banks in January 2025.

High dollar sales

Throughout the year, the RBI implemented various strategies to stabilise the rupee, including substantial dollar sales. As of September 2024, India's foreign exchange reserves totalled $704 billion. Following the peak reserves recorded in September 2024, the RBI sold a significant amount of dollars to ensure currency stability, the report said.

Till February 2025, the gross dollar sales stood at $371.6 billion, higher than the $153 billion recorded in the previous year. The dollar sales have added to the RBI's foreign exchange gains.

Gains from rupee securities

The RBI also earned from rupee securities. As of March 2025, its holdings in rupee securities had increased from ₹1.95 lakh crore to ₹15.6 lakh crore.

However, a decline in government securities (G-sec) yields affected the mark-to-market (MTM) gains, but the total interest income rose consistently.

What does high transfer mean for government?

According to the report, with RBI's surplus transfer, the fiscal deficit of the central government could ease by 20 to 30 basis points from the budgeted estimateof 4.5 per cent to 4.2 per cent of GDP.

The Union Budget FY26 estimated a total dividend income of ₹2.56 lakh crore from the RBI and public sector financial institutions. After the RBI's surplus transfer, the amount will be higher than the budget estimates.

Was higher surplus transfer possible?

The report further stated that the dividend payout could have exceeded ₹3.5 trillion if the RBI had not decided to increase its risk buffer. The Contingent Risk Buffer, a protection measure against future risks, was kept in the range of 7.5 per cent to 4.5 per cent of the central bank's balance sheet.

The dividend payout was calculated according to the updated Economic Capital Framework (ECF), which the RBI's Central Board approved in its meeting on May 15, 2025.

(With inputs from ANI)