The Reserve Bank of India (RBI) on Friday, 22 May, said it will transfer ₹2.87 lakh crore to the central government for FY26 at a time when the domestic economy is facing the heat of elevated crude oil prices driven by the Middle East conflict. Last year, the RBI released a dividend of ₹2.7 lakh crore to the Indian government.
The Central Board of Directors of the RBI met on Friday under the Chairmanship of Governor Sanjay Malhotra and approved the transfer of ₹2,86,588.46 crore to the central government for the accounting year 2025-26.
This is slightly below expectations, as a earlier suggested India’s central bank was likely to transfer a record surplus of nearly ₹3 lakh crore ($31.2 billion) this week to the government.
“The RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks. While we do not see extra borrowing risks for now, we continue to monitor the extent of subsidy and tax growth slowdown,” said Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.
In a media statement on 22 May, the RBI said its gross income increased by 26.42% over the previous year, while the expenditure before risk provisions increased by 27.60%.
The RBI further said that the net income, before risk provision and transfer to statutory funds, aggregated ₹3,95,972.10 crore in FY26 against ₹3,13,455.77 crore in FY25. The balance sheet of the bank expanded by 20.61% to ₹91,97,121.08 crore as on March 31, 2026.
While the RBI increased its dividend slightly this year compared to the last year, its central board also decided to increase the size of the contingent risk buffer, approving the transfer of ₹1,09,379.64 crore towards it for FY26, up from ₹44,861.70 crore in the previous year.
“The revised Economic Capital Framework (ECF) provides flexibility to maintain the Contingent Risk Buffer (CRB) between the range of 4.5% and 7.5% of the size of the balance sheet. Taking into consideration the current macroeconomic factors, financial performance of the bank and maintenance of appropriate risk buffers, the central board decided to transfer ₹1,09,379.64 crore towards the CRB for FY26 as against ₹44,861.70 crore in the previous year, and maintain the CRB at 6.5% of the size of the RBI balance sheet,” RBI stated.
The central bank’s dividend to the government will serve as a significant buffer for the Indian economy in times of elevated energy prices, which are straining the country’s fiscal position due to an inflating import bill, a widening current account deficit, and an exacerbation of the foreign fund sell-off.
Every year, the central bank pays a dividend to the central government from income generated by its investments, foreign exchange holdings, and fees from printing currency notes.