New Delhi, May 20, 2024.
The Reserve Bank of India (RBI) is expected to transfer a substantial dividend, possibly around Rs 1 lakh crore, to the government, significantly higher than last year’s payout, reported The Economic Times.
Recently, the RBI announced a significant reduction in the government’s borrowing through Treasury Bills, cutting the anticipated funds by Rs 60,000 crore.
Additionally, the central bank is supporting an operation to allow the government to prematurely repay Rs 60,000 crore of earlier borrowings.
These measures suggest an effort to utilise idle government funds, limited by election-related spending constraints, indicating an imminent improvement in the Centre’s financial situation.
The RBI is anticipated to declare the transfer of its surplus funds by late May. Union Bank of India’s chief economic advisor, Kanika Pasricha, noted in a research report that the RBI is expected to transfer a surplus of Rs 1 lakh crore to the government for FY25.
“We expect the RBI to transfer a surplus of INR 1,000 billion (₹1 lakh crore) to the government in FY25… while there are many moving parts in the RBI dividend calculation, our assessment shows a likely repeat of a strong dividend number,” Pasricha noted.
Analysts’ assessments, based on the RBI’s balance sheet, support the expectation of a larger surplus transfer compared to last year’s Rs 87,416 crore.