RBI’s dividend payout to Centre zooms 141% at ₹2.11 lakh cr in FY24

The Reserve Bank of India (RBI) during its meeting of the Central Board of the Reserve Bank of India on Wednesday approved a dividend of ₹2.11 lakh crore for the central government for FY 2023-24, which is 141% more than surplus transferred in FY2022-23.

The surplus transfer from the RBI exceeds the government's expectations. In FY24, the Centre reportedly had reportedly expected a 17% higher dividend payout from the RBI and other public sector banks as compared to FY23.

The RBI had approved a dividend payout of ₹87,420 crore to the Centre last year against the government’s target of ₹1.02 lakh crore, including the payout from other public sector banks in the fiscal year. In FY22, the central bank's surplus transfer stood at ₹30,307 crore.

The central bank, in its latest release, said: “The board approved the transfer of ₹2,10,874 crore as surplus to the central government for the accounting year 2023-24.”

The Central Board of the Reserve Bank of India increased the contingent risk buffer to 6.5% from 6% in FY23. “As the economy remains robust and resilient, the board has decided to increase the CRB to 6.50 per cent for FY 2023-24,” the RBI adds.

The 608th meeting of the Central Board of Directors of the RBI was held in Mumbai under the chairmanship of Governor Shaktikanta Das.

The board reviewed the global and domestic economic scenario, including risks to the outlook. It also discussed the working of the Reserve Bank during the year, April 2023 – March 2024, and approved the Reserve Bank’s Annual Report and Financial Statements for 2023-24.

“The transferable surplus for the year (2023-24) has been 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 extant Economic Capital Framework of the Reserve Bank of India (Chairman: Dr. Bimal Jalan),” the RBI said.

The 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.

The RBI also said that during accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of the Covid-19 pandemic, its board had decided to maintain the CRB at 5.50% of the RBI’s balance sheet size to support growth and overall economic activity.

With the revival in economic growth in FY2022-23, the CRB was increased to 6%, which has now been revised to 6.5%. “As the economy remains robust and resilient, the board has decided to increase the CRB to 6.50 per cent for FY 2023-24.”