RBI Surplus
RBI may transfer record surplus of near INR 3 tln to govt for FY25, say analysts
This story was originally published at 11:41 IST on 15 May 2025
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By Aaryan Khanna
NEW DELHI - The Reserve Bank of India is likely to transfer a record surplus of INR 2.8 trillion to the government for 2024-25 (Apr-Mar), according to the median estimate of eight economists. The RBI board meeting to decide the surplus transfer is expected this week.
The surplus is likely to exceed the INR 2.56 trillion that the Union Budget for FY26 pencilled in for the surplus transfer and dividends from state-owned banks. Last year, the government received a then-record INR 2.11-trillion from the central bank as surplus. The RBI board met to decide on the surplus transfer and vote on the central bank's accounts for FY24 on May 22, 2024.
The RBI's income likely zoomed in FY25 due to the larger size of its foreign exchange operations in order to prevent volatility in the rupee, analysts said. The Indian unit was remarkably stable during Apr-Sept 2024, largely due to the central bank's intervention which prevented both appreciation and depreciation in the rupee against the dollar.
"Amongst these, FX transactions are expected to be most significant in light of the central bank's measures to lower rupee volatility by strong dollar purchases earlier in FY25 and difference in the current vs historical exchange rate," DBS Bank Senior Economist Radhika Rao said. "Add to this the interest income on government securities and earnings from funds extended to banks in midst of previous tight liquidity."
Kotak Mahindra Bank expects gross FX sales would have totalled $375 billion-$400 billion in FY25 against $153 billion the previous fiscal, which would generate a significant accounting profit for the central bank. It has the highest estimate for the surplus transfer, in excess of INR 3.0 trillion and potentially up to INR 3.5 trillion.
"Based on the math, surplus should exceed INR 3.5 trillion," said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. "But because RBI is also revising the economic capital framework that determines payout, we suspect they will increase the capital requirement and thus give somewhere between INR 2.5 trillion and INR 3 trillion."
The RBI last year raised its Contingent Risk Buffer to 6.5% of its balance sheet, which required an additional transfer of INR 428 billion to its Contingency Fund at the end of FY24. However, most analysts do not expect a higher share of provisioning in FY25, which would prevent a decrease in the surplus transfer. The RBI's current buffer is at the top end of the 5.5-6.5% range recommended by the Bimal Jalan Committee, which the central bank adopted into its Economic Capital Framework in 2019. Instead, the provisions may grow in line with the RBI's balance sheet growth in FY25.
"In FY25, RBI's balance sheet grew by 6.7% YoY (year-on-year) which was slower than previous year (11.4% YoY)," IDFC FIRST Bank Chief Economist Gaura Sen Gupta said in a note. "The slowdown in balance sheet growth was due to dollar selling by RBI as the balance of payment turned negative. In fact, if revaluation gains are excluded, RBI's balance sheet grew by only 2.4% as of March 2025."
The estimates for RBI's surplus transfer to government for FY25 are as follows:
| Institution | Estimate (in INR trillion) |
| DBS Bank | 2.5-2.7 |
| Deutsche Bank | 2.5-3.0 |
| HDFC Bank | 2.50 |
| ICICI Bank | 3.0 |
| IDFC FIRST Bank | 2.6-3.0 |
| ICICI Securities Primary Dealership | 2.5-3.0 |
| Kotak Mahindra Bank | 3.0-3.5 |
| QuantEco Research | 2.8-2.9 |
End
Edited by Vandana Hingorani
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