RBI Declares Record Dividend Amid Global Challenges

The Reserve Bank of India has declared a record annual dividend of Rs 2.69 lakh crore to the central government for the fiscal year 2024-25. Analysts attribute these gains to robust US dollar sales and interest income from securities. This dividend surpasses the previous year's transfer of Rs 2.1 lakh crore.

The decision was made during the RBI's 616th board meeting, chaired by Governor Sanjay Malhotra. Despite expectations for a higher sum, increased risk provisioning under the revised Economic Capital Framework has kept the payout lower than Rs 3 lakh crore. Analysts believe foreign exchange operations played a significant role in this year's substantial surplus.

The Finance Minister's projected dividend of Rs 2.56 lakh crore in her Budget is now likely to be exceeded. This will aid India's fiscal strategy, alleviating pressure from defence expenditures and other fiscal challenges, potentially reducing the fiscal deficit by 20 basis points and providing a buffer for additional government spending.

(With inputs from agencies.)