The Reserve Bank of India (RBI) has approved a significant dividend payout of approximately ₹2.69 lakh crore for the financial year 2025, marking an increase from the ₹2.1 lakh crore dividend distributed last year. This transfer to the government is a crucial fiscal booster, helping to reduce India’s fiscal deficit target to 4.4% for the year, down from 5.6% last year.
This decision was made during the RBI Central Board’s 616th meeting, where officials also decided to raise the contingency risk buffer from 6.5% to 7.5% — signaling a more cautious approach by setting aside more reserves to guard against unexpected economic risks.
The dividend payout stems largely from:
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Strong sales of foreign currency reserves,
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Gains from fluctuations in currency valuations,
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Steady interest income on government securities.
Notably, the RBI was the largest seller of foreign exchange reserves among Asian central banks in January, which contributed to its increased surplus.
The government had initially expected a dividend of around ₹2.56 lakh crore in the Union Budget for 2025-26, but the RBI’s actual transfer is even higher, providing additional fiscal space.
This infusion will help the government maintain its ambitious ₹11.21 lakh crore infrastructure spending plan and continue with tax reliefs announced for 2025-26, while keeping the fiscal deficit in check.
Overall, the RBI’s higher dividend is a reflection of its robust earnings from investments and foreign reserves, and it provides a welcome financial cushion for the government amid ongoing economic uncertainties.
