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Informist, Friday, May 23, 2025

 

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--RBI: To transfer INR 2.69 tln as surplus to govt for FY25 
--RBI: Raised Contingent Risk Buffer to 7.50% from 6.50% for FY25
--RBI: Change Contingent Risk Buffer range to 4.50-7.50% of balance sheet
--CONTEXT: Contingent Risk Buffer range was 5.50-6.50% from FY19 to FY24 
--RBI: Board approved annual report, financial accounts for FY25
--RBI: Board reviewed global, local econ scenario including risks to outlook

 

NEW DELHI – The Reserve Bank of India's central board of directors Friday approved the transfer of a record INR 2.69 trillion as surplus to the central government for financial year 2024-25 (Apr-Mar), the central bank said in a release.

 

At INR 2.69 trillion, the surplus transfer is slightly lower than the INR 2.8 trillion analysts had expected. The RBI had transferred INR 2.11 trillion to the government last year. The Union Budget for FY26 had pencilled in INR 2.56 trillion as receipts from RBI's surplus transfer and dividends from state-owned banks.

 

The RBI also revised the economic capital framework, under which the risk provisioning under the Contingent Risk Buffer has to be maintained within a range of 4.50-7.50% of the central bank's balance sheet. For FY25, the RBI' central board had increased the Contingent Risk Buffer to 7.50%, from 6.50% kept last year.

 

This is the first major revision in the economic capital framework since 2019. In August 2019, the RBI, on the recommendation of a panel headed by former governor Bimal Jalan, adopted the Economic Capital Framework requiring it to maintain a contingency risk buffer of 5.5-6.5% of its balance sheet.

 

The Jalan committee had recommended the risk provisioning under the contingent risk buffer be maintained within a range of 5.50% to 6.50% of the RBI's balance sheet. The central board of the RBI had maintained the contingent risk buffer at 5.50% of the central bank's balance sheet to support growth and overall economic activity during 2018-19 (Apr-Mar) to FY22. As economic growth revived in FY23, the buffer was increased to 6.00%. The buffer was further increased to 6.50% for FY24.

 

"Based on the revised ECF (economic capital framework) and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50%," the RBI said.

 

The RBI board also reviewed the global and domestic economic scenario, including risks to the outlook and approved the RBI's annual report and financial statements for FY25. 

 

The RBI central board was chaired by Governor Sanjay Malhotra and included deputy governors M. Rajeshwar Rao, T. Rabi Sankar, Swaminathan J., and Poonam Gupta. The board meeting was also attended by Finance Secretary Ajay Seth, Financial Services Secretary M. Nagaraju, Satish K. Marathe, Revathy Iyer, Sachin Chaturvedi, Venu Srinivasan, Pankaj Ramanbhai Patel and Ravindra H. Dholakia.  End

 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

 

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