RBI announces record Rs 2.87 lakh crore dividend to Centre for FY26

Why in News?

The Reserve Bank of India (RBI) has announced a record surplus transfer of ₹2.86 lakh crore to the Central Government for the financial year 2025–26. The decision was taken during the 623rd meeting of the RBI Central Board chaired by RBI Governor Sanjay Malhotra in Mumbai. 

What is RBI Surplus Transfer?

The RBI transfers a portion of its surplus income or profits to the Government of India after maintaining necessary reserves and risk buffers. The surplus mainly comes from:

• Interest earned on domestic investments,
• Returns from foreign exchange reserves,
• Foreign exchange operations,
• Fees from currency printing and banking operations.

Key Highlights

• RBI transferred a record ₹2.86 lakh crore surplus for FY26.
• The RBI’s balance sheet expanded by 20.61% to ₹91.97 lakh crore as of March 31, 2026.
• Gross income increased by 26.42% compared to the previous year.
• Net income before risk provisions stood at ₹3,95,972.10 crore in FY26.

The strong surplus was mainly supported by gains from foreign exchange interventions and higher investment income. 

Economic Capital Framework (ECF)

The surplus transfer is governed by the RBI’s Economic Capital Framework (ECF), which determines: 

• Risk provisioning,
• Contingent reserves,
• Transferable surplus.

The ECF allows the RBI to maintain the Contingent Risk Buffer (CRB) within a range of 4.5 per cent to 7.5 per cent of the RBI’s balance sheet size. 

What is a Contingent Risk Buffer (CRB)?

The Contingent Risk Buffer is the RBI’s financial safety cushion maintained to absorb unexpected risks such as currency volatility, interest-rate shocks, financial crises, market losses and operational risks.

FY26 CRB Decision

• RBI transferred ₹1,09,379.64 crore to the CRB for FY26.
• The CRB was maintained at 6.5% of the balance sheet size.

Background

The Bimal Jalan Committee had earlier recommended a framework for determining:

• Appropriate capital reserves for the RBI,
• Surplus distribution policy.

The RBI balances supporting government finances through surplus transfers, and maintaining sufficient reserves for financial stability. 

Sources: IE & ET