RBI's Record Dividend Boosts Indian Economy Amidst Global Challenges

The Reserve Bank of India (RBI) announced a historic Rs 2.69 lakh crore dividend to the government for the fiscal year 2024-25, surpassing previous records by 27.4%. This strategic decision aims to aid the exchequer amidst economic pressures such as US tariffs and increased defense expenditures due to ongoing conflicts with Pakistan.

The announcement followed the 616th meeting of the RBI's Central Board of Directors, chaired by Governor Sanjay Malhotra. This new dividend surpasses the Rs 2.1 lakh crore distributed in 2023-24, reflecting a commitment to bolstering the nation's financial resilience. The transfer was calculated based on a revised Economic Capital Framework approved on May 15, 2025.

The framework requires the Contingent Risk Buffer (CRB) to stay within 4.50% to 7.50% of the RBI's balance sheet, an increase motivated by macroeconomic assessments. Chief Economist Aditi Nayar of Icra highlighted the positive impact on non-tax revenues, offering fiscal comfort as the government aims to lower the fiscal deficit to 4.4% in the upcoming fiscal year.

(With inputs from agencies.)