RBI Expected to Pay Record Dividend to Government this Fiscal Year
Reserve Bank of India Expected to Pay Record Dividend to Government
The Reserve Bank of India (RBI) is anticipated to provide the highest-ever dividend to the government, offering a fiscal cushion to address the challenges stemming from the ongoing Middle East crisis, according to sources.
Last year, the RBI made a record dividend payout of Rs 2.69 lakh crore to the central government for 2024-25, which was 27 per cent higher than the Rs 2.11 lakh crore transferred in the previous year.
The RBI is likely to decide on the dividend quantum in its board meeting, which is expected to be held during this month, sources said.
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The transferable surplus for any financial year is determined based on the revised Economic Capital Framework (ECF) as approved by the Central Board of the RBI. The revised framework stipulates that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 7.50 to 4.50 per cent of the RBI’s balance sheet.
As per the Budget documents, the Centre expects Rs 3.16 lakh crore in dividends and surpluses from the Reserve Bank of India, nationalised banks, and financial institutions in 2026-27, representing an increase of about 3.75 per cent over the current fiscal.
Public Sector Banks Post Record Profit in FY26
Improved asset quality, healthy credit expansion, and higher income contributed to improved profitability of public sector banks (PSBs) during FY 2025–26. Aggregate operating profit reached Rs 3.21 lakh crore, while aggregate net profit increased by 11.1 per cent to a historic high of Rs 1.98 lakh crore, marking the fourth consecutive year of aggregate profitability for PSBs.
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| Year | Aggregate Operating Profit (Rs lakh crore) | Aggregate Net Profit (Rs lakh crore) |
|---|---|---|
| 2025-26 | 3.21 | 1.98 |
| 2024-25 | 2.85 | 1.77 |
Dividend and Reserve Bank's surplus transfers fall under the non-tax revenue category. The Centre expects Rs 6.66 lakh crore as non-tax revenue next fiscal, lower than 6.67 lakh crore in 2025-26.
The revenue from taxes has been pegged at Rs 28.66 lakh crore, up 7.18 per cent from Rs 26.74 lakh crore in 2025-26.
Investor Takeaway
The RBI is expected to pay a record dividend to the government, which may provide a fiscal cushion to address challenges arising from the Middle East crisis.
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