RBI approves record dividend of Rs 2.11 lakh crore to government for FY24

The Reserve Bank of India (RBI) approved a dividend of nearly Rs 2.11 lakh crore for the central government for the fiscal year 2024, marking a nearly 140% increase from the previous fiscal year.

In FY23, the RBI had transferred Rs 87,416 crore to the Centre as surplus.

During the 608th Meeting of the Central Board held in Mumbai, the board discussed the global and domestic economic scenarios, including potential risks to the outlook.

The board ultimately decided to transfer a surplus of Rs 2,10,874 crore.

The RBI said, “During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of the Covid-19 pandemic, the Board had decided to maintain the CRB at 5.50 per cent of the Reserve Bank’s Balance Sheet size to support growth and overall economic activity.”

However, with the economic growth revival in FY23, the Contingency Risk Buffer (CRB) was increased to 6%. For FY24, it was further raised to 6.5%, reflecting the continued robustness and resilience of the economy.

“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 Board thereafter approved the transfer of Rs 2,10,874 crore as surplus to the Central Government for the accounting year 2023-24,” RBI said.

Earlier reports had suggested that the RBI would approve a dividend of over Rs 1 lakh crore for the government for FY24.

However, the final amount approved is significantly higher than expert predictions. This surplus transfer will not only bolster the government’s finances but also assist in meeting its budget deficit target.v