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Informist, Friday, May 22, 2026

 

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--RBI: To transfer INR 2.87 tln as surplus to govt for FY26 
--RBI: Maintained Contingent Risk Buffer at 6.50% for FY26 
--RBI: Lowered Contingent Risk Buffer to 6.5% for FY26 from 7.50% for FY25 
--RBI: Board approved RBI Annual Report, financial statements for FY26 
--RBI: Board reviewed global, domestic econ scenario, risks to outlook 
--RBI:Gross income up 26.4% FY26; expenditure before risk provisions up 27.6% 
--RBI surplus transfer of INR 2.87 tln to govt for FY26 highest ever 
--RBI: Net income INR 3.96 tln FY26 vs INR 3.13 tln in FY25 
--RBI: Balance Sheet up 20.6% at INR 91.97 tln as on Mar 31 
--RBI: Risk buffer cut considering current macroecon factors 
--RBI: Risk buffer cut considering financial performance 
--RBI: Risk buffer cut considering maintenance of appropriate risk buffers 
--RBI: To transfer INR 1.09 tln to Risk Buffer for FY26 vs INR 449 bln FY25

 

NEW DELHI – The Reserve Bank of India will transfer a record INR-2.87-trillion surplus to the government for financial year 2025-26 (Apr-Mar), the central bank said in a release Friday. The surplus transfer was on the lower end of market expectations, though it will help the government's revenues, which are seen stretched due to the war in West Asia.

 

At INR 2.87 trillion, the surplus transfer was higher than the INR 2.69 trillion transferred for FY25. Economists and market participants expected the RBI to transfer around INR 2.7 trillion to INR 3.4 trillion to the government as surplus for FY26. 

 

The RBI's surplus transfers have increased over the last few years, helping the government meet its fiscal deficit targets. 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's central board decided to transfer INR 1.09 trillion to its risk buffer for FY26, over double that of the INR 449 billion transfer for the previous year. However, it approved reducing the contingent risk buffer to 6.5% of its balance sheet in FY26 from 7.5% in FY25, within the 4.5-7.5% range under the Economic Capital Framework revised last year. The reduction was taking into consideration the current macroeconomic factors, the central bank's financial performance and maintence of appropriate risk buffers, the release said.

 

The RBI board deliberated on the annual accounts at the meeting. It also reviewed the global and domestic economic scenario, including risks to the outlook. The government's potential hole of as much as INR 5 trillion in its finances due to higher expenses and lower revenues due to the war may not be filled since the Budget had already assumed a large surplus transfer. With the focus re-emerging on fiscal risks, the 10-year benchmark government bond yield rose to the day's high of 7.09% from 7.06?fore the release.

 

"The RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks," Upasna Bhardwaj, chief economist, Kotak Mahindra Bank, said. "While we do not see extra borrowing risks for now we continue to monitor the extent of subsidy and tax growth slowdown." ICRA expects a fiscal slippage of 40 basis points from the Budgeted aim of 4.3% of GDP in FY27. The government has later pegged its fiscal gap at 4.5% of GDP, based on revisions to growth calculations in previous years.

 

The central bank's gross income rose by 26.4% on year, while expenses before the risk provisions rose at a quicker pace of 27.6%. Still, the RBI's net income surged to INR 3.97 trillion in FY26 from INR 3.13 trillion the previous year. The balance also zoomed by 20.6% to INR 91.97 trillion, likely due to the sharp revalation of the central bank's gold holdings. Bullion prices rose sharply in FY26 but the RBI's gold holdings in tonnes were only marginally higher at 880.34 as on Mar. 27, according to latest central bank said.

 

The meeting was chaired by RBI Governor Sanjay Malhotra and included deputy governors Swaminathan J., Poonam Gupta, Shirish Chandra Murmu, and Rohit Jain. Department of Financial Services Secretary M. Nagaraju was also present, as were appointees Revathy Iyer, Sachin Chaturvedi, Satish Marathe, Anand Mahindra, Venu Srinivasan, and Pankaj Patel. Notably, Department of Economic Affairs Secretary Anuradha Thakur was not present, along with board members Swaminathan Gurumurthy and Ravindra Dholakia.  End

 

US$1 = INR 95.69

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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