The Reserve Bank of India (RBI) has approved a historic dividend transfer of Rs.2.69 lakh crore to the central government for the financial year 2024-25. This marks a significant increase from the previous year and is expected to support the government’s fiscal management and liquidity.

Key Points:

1. The RBI’s board approved a dividend transfer of Rs.2,68,590.07 crore for FY 2024-25, exceeding budget estimates.
2. The Contingent Risk Buffer (CRB) was increased from 6.5% to 7.5% of the RBI’s balance sheet to strengthen financial stability.
3. The record surplus is driven by strong foreign exchange earnings, active dollar sales, and rising interest income from securities.
4. The dividend is expected to reduce the government’s fiscal deficit by about 20 to 30 basis points.
5. The transfer will inject significant liquidity into the banking system, potentially raising surplus funds to Rs.5.5–6 lakh crore.