RBI's Record Dividend Surplus: A Deep Dive into Economic Capital Framework

The Reserve Bank's Central Board reviews its Economic Capital Framework, setting grounds for surplus transfer decisions. A record Rs 2.1 lakh crore dividend was paid to the government for 2023-24. Anticipations of a higher dividend this fiscal are underway, with the next verdict due in May 2023.

The Reserve Bank's Central Board convened on Thursday to scrutinize its Economic Capital Framework (ECF), crucial for determining the surplus transfer, including dividend allocations to the government.

The Reserve Bank of India (RBI) recently made a landmark payout of Rs 2.1 lakh crore to the government for 2023-24, surpassing the Rs 87,416 crore transferred in 2022-23. Expectations are building for an even larger payout this fiscal year, a decision anticipated at the next Central Board meeting scheduled for May 23.

The 615th board gathering, chaired by Governor Sanjay Malhotra, also focused on aligning with the ECF parameters set by the 2019 Bimal Jalan committee. The committee recommended maintaining risk provisions within 6.5 to 5.5 percent of RBI's balance sheet. The Union Budget projects a dividend income of Rs 2.56 lakh crore from RBI and public sector entities.

(With inputs from agencies.)