RBI surplus transfer to govt seen at INR 2.7 tln, says IDFC FIRST Bank
This story was originally published at 19:47 IST on 4 May 2026
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NEW DELHI – The Reserve Bank of India is likely to transfer INR 2.7 trillion as surplus to the government for 2025-26 (Apr-Mar), according to IDFC FIRST Bank Chief Economist Gaura Sen Gupta. At INR 2.7 trillion, the surplus transfer would match last year's record high.
The government, in the Union Budget for FY27, projected the surplus transfer from the RBI and dividends from public sector banks and financial institutions at INR 3.16 trillion, up 3.7% from the revised estimate of INR 3.05 trillion for FY26.
The RBI transferred a record INR 2.7 trillion as surplus to the government in FY26. Over the years, the RBI surplus transfer has become a crucial part of the government's non-tax revenues. The RBI transfers the surplus to the government in May of the subsequent financial year.
The RBI's surplus transfer for FY26 is likely to be supported by interest income on foreign securities and rupee securities, Sen Gupta said in a report. Earnings on foreign exchange transactions are expected to be lower, with gross dollar sales at $166 billion in Apr-Feb, down from $399 billion in FY25, the economist said.
"Historical cost of dollar purchase is tracking at 84 in FY26 v/s 82 in FY25, which remains below the current spot rate," Sen Gupta said. "RBI's forward book was already large at the start of FY26, limiting its ability to sterilize its spot intervention. This resulted in lower gross dollar sales during the year. The West Asia crisis would have increased dollar selling in March 2026, which has been incorporated in the estimate."
The central bank's balance sheet grew 19.6% in FY26, compared with 6.7% in FY25, Sen Gupta noted. "The accelerated pace of balance sheet expansion reflects OMO (open market operation) purchases by RBI and revaluation gains on foreign currency reserves and gold holdings."
IDFC FIRST Bank's estimate of RBI surplus transfer is based on a Contingent Risk Buffer of 7.5% of total assets, the upper bound of the required range of 7.5% to 4.5%. For FY25, the RBI increased the Contingent Risk Buffer to 7.50% from 6.50%, the level it had kept the previous year. End
US$1 = INR 95.09
Reported by Shubham Rana
Edited by Saji George Titus
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