Economists Optimistic on Higher RBI Dividend Payout — Know Key Details

According to Madan Sabnavis, Chief Economist at Bank of Baroda, the Reserve Bank of India’s dividend to the centre could reach ₹3 lakh crore, exceeding the budget estimates. His view aligns with the country's leading economists. His views also align with CNBC-TV18’s poll of the country's leading economists.

“We should remember that interest rates remained high last year, which means the RBI likely earned more through interest income and gains on its treasury holdings,” Sabnavis said.

As per the estimates, RBI dividend pegged at around ₹2.5 lakh crore, which is ₹2.1 lakh crore received in FY24.

Rajeev Radhakrishnan, CIO–Fixed Income at SBI Mutual Fund said that any amount less than ₹3 lakh crore is a disappointment.

Sabnavis is estimating a repo rate cut of 50 basis points, slashing it down to 5.5%, while keeping inflation figures at 4%. Given the RBI’s real interest rate target of 1.5%, a 5.5% repo rate appears reasonable.

Radhakrishnan is of the opinion that if the policy repo rate moves towards 5.5% in this rate cycle, the 10-year bond yield is set to touch 6–6.10%. However, he also notes that expectations regarding the magnitude of policy rate cuts may be revised as the rate-cutting cycle unfolds.