RBI’s record dividend: Lots of implications

Mumbai: The RBI has announced a record dividend of Rs2.68trillion to the Centre for FY25, which is around 28 per cent higher than the Rs2.1 trillion assumed in the FY26 Union Budget. This marks the third consecutive year where the actual dividend has exceeded the initial budgeted number, as per Emkay, albeit the surprise is modest. Talking to Bizz Buzz, Anil Kumar Bhansali, Head of Treasury · Finrex Treasury Advisor says, “Last year the RBI gave its highest ever dividend payout of Rs.210874 crore while in the current year RBI has given a dividend of Rs268590.07 crore which is 27.4 per cent higher than last year dividend.”

The surplus generated by RBI this year has been mainly from the dollar sales whose costing may be around 64/65 while the current dollar rate is around 85, thus earning Rs20 per dollar. The RBI’s record dividend payout to the government has stirred a debate in the bond market too. On one hand, the absolute number is historic; on the other, some participants feel it fell short of what the market had priced in. As always, it’s not just the size of the transfer, but how it plays into the broader liquidity and fiscal picture. The key question now is if the RBI continue its liquidity infusion through daily VRR auctions and outright OMO purchases? The answer will determine where bond yields head next. Venkatakrishnan Srinivasan Founder – Rock fort Fincap says, “If the RBI keeps liquidity flowing for some more time, we could see yields drifting lower.”

But if the central bank decides to pause or scale back these infusions after the upcoming monetary policy, we may see some reversal in yields, he said. Dr SoumyaKanti Ghosh, SBI Group’s chief economic advisor says, “The RBI has increased the risk buffer, otherwise the dividend transfer could have topped Rs3.5 trillion.”