RBI likely to transfer Rs 1 lakh crore to govt in FY25
Reserve Bank of India (RBI) is likely to transfer approximately Rs 1 lakh crore to the government IN FY25 according to a report by Union Bank of India.
The report said that RBI is anticipated to maintain a robust dividend payout for the fiscal year 2025 (FY25). This projection represents a slight increase from Rs 874 billion transferred in the previous fiscal year.
«The government has budgeted the FY25 dividend for RBI and PSU banks & financial institutions at Rs 1020bn, vis-a-vis Rs 1044 bn in FY24. In our view, a positive surprise is likely, similar to last year when initial budget estimate for overall dividend was only Rs 480 bn» said the report.
Analysts in the report predict a potential positive surprise, akin to the previous fiscal year, when the initial budget estimate for dividends was significantly lower at Rs 480 billion. Despite several factors influencing RBI's dividend calculation, such as interest earnings and foreign exchange (FX) gains, analysts predict a continuation of strong dividend figures.
About 70% of the Reserve Bank of India's balance sheet is comprised of foreign currency assets, while around 20% is held in domestic government bonds. It is anticipated that interest income generated from these securities will fall within the range of Rs 1.5-1.7 trillion.
Additionally, interest from liquidity operations has increased RBI's earnings, particularly as the banking system returned to a deficit mode from September 2023.
While income gains of RBI from FX (Forex) sales decreased slightly due to
