- Record public sector bank profits to boost surplus transfer.
The Reserve Bank of India is likely to transfer a record dividend to the central government this year, giving the Centre additional fiscal room as it navigates economic pressures from the ongoing Middle East crisis, sources said.
The RBI’s central board is expected to meet this month to finalise the dividend amount.
Last Year’s Record Payout
In 2024-25, the RBI transferred Rs 2.69 lakh crore to the government, which was a record at the time, and 27 per cent higher than the Rs 2.11 lakh crore paid the previous year. This year’s payout is expected to surpass that figure.
The dividend amount is determined each year based on the RBI’s revised Economic Capital Framework, which was approved by its central board. Under this framework, the RBI is required to maintain a Contingent Risk Buffer (a reserve set aside to absorb unexpected financial shocks) within a range of 4.50 to 7.50 per cent of its balance sheet. The surplus left after maintaining this buffer is what gets transferred to the government.
Government Had Budgeted Conservatively
The Union Budget for 2026-27 had estimated Rs 3.16 lakh crore in combined dividends and surpluses from the RBI, nationalised banks, and other financial institutions. This is about 3.75 per cent more than the current fiscal year. However, sources said the actual payouts are expected to exceed this estimate.
Public sector banks have also posted record profits in FY26, which will add to the total surplus transferred. Their aggregate net profit rose 11.1 per cent to Rs 1.98 lakh crore. A historic high and the fourth consecutive year of aggregate profitability. Combined operating profit stood at Rs 3.21 lakh crore. Improved asset quality, healthy credit growth, and higher income were cited as the key drivers.
Dividends from public sector enterprises and other investments have been budgeted at Rs 75,000 crore for the next fiscal year, up from Rs 71,000 crore in the current year.
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Where This Money Fits In The Budget
Dividend receipts and RBI surplus transfers are counted as non-tax revenue, money the government earns without levying taxes. The Centre has projected total non-tax revenue of Rs 6.66 lakh crore for the next fiscal, marginally lower than Rs 6.67 lakh crore in 2025-26.
Tax revenue, on the other hand, has been pegged at Rs 28.66 lakh crore for 2026-27, up 7.18 per cent from Rs 26.74 lakh crore in the current fiscal year.
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