RBI to pay ₹87,416 crore as dividend to Centre for FY23

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The central board of the RBI on Friday approved the transfer of ₹ 87,416 crore as surplus to the central government for the 2022-23 accounting year. This is 188 per cent higher than the previous financial year’s surplus transfer of Rs. 30,307 crore.

The Board decided to keep the contingency risk buffer (CRB) at 6 percent (5.50 percent in FY22). According to the Expert Committee to Review the Current Economic Capital Framework, CRB should be maintained in the range of 6.5 percent to 5.5 percent of the RBI balance sheet, including 5.5 to 4.5 percent for monetary and financial stability risks and 1 percent for credit and operational risks.

Madhavi Arora, Chief Economist, Emkay Global Financial Services said: “RBI earnings were in line with our expectations. Gains on record FX total sales in FY23 will be the main driver of the ample surplus, although the gain is partially offset by higher provisions on MTM (mark-to-market) losses on foreign securities. Besides, a higher 6 percent share of the balance sheet versus 5.5 percent in the past also captured the earnings. Dividends can bring in additional revenue of about 0.2 percent of GDP.”

The Central Board of the Reserve Bank of India, in its meeting, reviewed the global and domestic economic situation and the challenges associated with it including the impact of current global geopolitical developments, according to an RBI statement. The Board also discussed the work of the Reserve Bank during fiscal year 23 and approved the annual report and accounts for the 2022-23 accounting year.