RBI's board approves record ₹2.69 trillion surplus transfer to govt
Mumbai, May 23, 2025
RBI approves a record ₹2.69 trillion surplus transfer to the Centre for FY25 while revising the Contingent Risk Buffer range to 7.5 to 4.5 per cent of its balance sheet
The Reserve Bank of India’s (RBI’s) central board, which met today, has approved a record ₹2.69 trillion surplus transfer to the government for the financial year 2024–25, while expanding the range of the Contingent Risk Buffer (CRB) from 7.5 per cent to 4.5 per cent of the central bank’s balance sheet.
“Based on the revised Economic Capital Framework, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent,” the RBI said in a statement.
In the last financial year, the RBI had transferred ₹2.11 trillion to the government.
The CRB had previously been increased to 6.00 per cent for FY 2022–23 and to 6.50 per cent for FY 2023–24.
The RBI further stated that, in line with the recommendations of the Expert Committee, it had undertaken an internal review of the Economic Capital Framework, based on experience gained from its operationalisation, developments in the external operating environment, and changes in the RBI’s asset profile.
It was decided to retain the broad principles of the framework, with no major changes in the risk assessment methodologies.
“Certain changes have, however, been made with the objective of further strengthening the framework to align better with any emerging risks to the balance sheet of the RBI,” the statement said.
With respect to the Surplus Distribution Policy, any available equity in excess of 7.5 per cent of the balance sheet size (after considering shortfall in market risk buffers, if any) may be written back from the Contingency Fund to income.
“In case the available equity is below the lower bound of its requirement, no surplus will be transferred to the government till at least the minimum level of Required Realised Equity is achieved,” the RBI added.
The transferable surplus for any year is determined based on the Economic Capital Framework (ECF) adopted by the central bank in 2019, for finalising the accounts for 2018–19, in accordance with the recommendations of the Expert Committee to review the extant Economic Capital Framework of the Reserve Bank of India, chaired by Bimal Jalan.
[The Business Standard]
