RBI Transfers Record ₹2.69 Lakh Crore Surplus to Centre for FY25

In a landmark fiscal development, the Reserve Bank of India (RBI) has approved a record surplus transfer of ₹2.69 lakh crore to the Central Government for the financial year 2024-25. The decision, taken during the 616th meeting of the Central Board of Directors chaired by RBI Governor Sanjay Malhotra, reflects strong financial performance and macroeconomic stability. The transfer follows a hike in the Contingent Risk Buffer (CRB) to 7.5%, under the revised Economic Capital Framework (ECF).

Why in News?

The RBI has made headlines for approving the highest-ever dividend to the Government of India. This move is not only significant for fiscal policy and deficit management but also reflects India’s improving macroeconomic fundamentals post-COVID.

Context and Decision

• RBI’s 616th Central Board meeting held on May 23, 2025.
• Chaired by RBI Governor Sanjay Malhotra.
• Approved ₹2,68,590.07 crore as surplus transfer for FY25.

About the Surplus Transfer

• Surplus derived from RBI’s income from open market operations, foreign exchange, and investments.
• Surplus is transferred after accounting for expenses, provisions, and risk buffers.

Contingent Risk Buffer (CRB) Changes

• Maintained at 5.5% between 2018-19 and 2021-22 (COVID years).
• Raised to 6.0% in FY23 and 6.5% in FY24.
• Further increased to 7.5% in FY25.
• Based on the revised ECF approved on May 15, 2025.

About the Economic Capital Framework (ECF)

• Introduced in 2019 following recommendations of Bimal Jalan Committee.
• Specifies guidelines for risk provisioning and surplus distribution.
• Ensures balance between RBI’s financial stability and the government’s fiscal needs.

Participants in the Meeting

• Deputy Governors: M. Rajeshwar Rao, T. Rabi Sankar, Swaminathan J., Dr. Poonam Gupta.
• Other Board Members: Ajay Seth (Dept. of Economic Affairs), Nagaraju Maddirala (Dept. of Financial Services), Satish K. Marathe, Revathy Iyer, Prof. Sachin Chaturvedi, Pankaj R. Patel, Dr. Ravindra Dholakia.