RBI’s Record Rs 2.7 trillion dividend to Government fueled by dollar sales and interest gains: SBI Report

The Reserve Bank of India (RBI) has transferred a record dividend of nearly Rs 2.7 trillion for the fiscal year, according to a report by the State Bank of India (SBI). The bumper payout—well above the Union Budget’s estimate of ₹2.56 lakh crore—was driven by strong foreign exchange market interventions, robust dollar sales, and rising interest income.

The SBI report highlights that the RBI’s surplus transfer was underpinned by aggressive foreign exchange operations. Notably, the central bank emerged as the largest seller of forex reserves among Asian central banks in January 2025. This proactive intervention helped stabilize the rupee amid global currency fluctuations.

RBI’s gross dollar sales stood at a staggering USD 371.6 billion for the current financial year up to February 2025—more than double the USD 153 billion sold in FY24. These transactions enabled the RBI to secure substantial forex trading gains, significantly boosting its surplus.

India’s foreign exchange reserves had touched an all-time high of USD 704 billion in September 2024. In the months that followed, the RBI offloaded considerable dollar volumes to maintain currency stability, further contributing to its revenue stream.

In addition to forex gains, the RBI saw an increase in interest income from its rupee securities portfolio. Holdings in these securities rose by Rs 1.95 lakh crore, reaching Rs 15.6 lakh crore as of March 2025. While a decline in government securities (G-sec) yields reduced mark-to-market (MTM) gains, interest earnings remained resilient.

The report also emphasized the RBI’s prudent fiscal management. Although the dividend payout could have exceeded Rs 3.5 trillion, the central bank opted to strengthen its Contingent Risk Buffer (CRB)—a financial safeguard against future economic shocks. The CRB was maintained within the 5.5% to 6.5% range of the RBI’s balance sheet, aligning with recommendations from the Central Board.

The transferable surplus was calculated under the revised Economic Capital Framework (ECF), approved during the RBI Central Board’s meeting on May 15, 2025.

This unexpected windfall is a major fiscal boost for the government ahead of the 2025–26 financial year, offering greater flexibility in managing expenditures and deficit targets.