The Reserve Bank of India (RBI) is expected to transfer a record surplus dividend of ₹2.7 lakh crore to ₹3 lakh crore to the central government in FY26, marking a nearly 50% year-on-year increase.
Key Drivers Behind the Surplus Surge
According to a report by Front Wave Research, the sharp rise in surplus transfer is driven by three major factors:
- Forex Market Gains – The RBI’s timely forex operations generated strong trading profits, as the central bank bought US dollars at ₹83–84 and sold them at ₹84–87.
- Higher Interest Income – The RBI’s foreign exchange reserves, exceeding USD 600 billion, earned higher interest income due to elevated global rates.
- Domestic Market Earnings – The RBI gained solid income through Open Market Operations (OMOs), bond holdings, and repo transactions, strengthening its balance sheet.
Impact on India’s Fiscal Position
The dividend transfer is expected to significantly improve banking system liquidity, potentially increasing it to ₹5.5–6 lakh crore, reversing the recent liquidity deficit. The bond market has already reacted, with the yield on the 10-year government bond falling to 6.23%, signaling possible rate cuts.
Sectoral Benefits
The anticipated dividend is expected to act as a stealth stimulus, benefiting sectors such as PSU banks, NBFCs, infrastructure, and consumption, which are already witnessing positive momentum.
Conclusion
With the record dividend transfer, the RBI aims to strengthen India’s fiscal position, improve banking liquidity, and support economic growth through FY26. The official announcement is expected by late May.
