The Reserve Bank of India’s central board on Friday approved the transfer of Rs 87,416 billion as surplus to the central government for the fiscal year 2022-2023. This is 188% higher than the previous financial year’s surplus transfer of ₹30,307 crore.
The Board of Directors has decided to keep the contingency risk buffer (CRB) at 6% (5.50% in fiscal year 2022). According to the expert committee to review the existing economic capital framework, the CRB must be maintained in the range of 6.5% to 5.5% on the RBI’s balance sheet, including 5.5 to 4, 5% for monetary and financial stability risk and 1% for credit and operational risk.
Madhavi Arora, Chief Economist, Global Financial Services at Emkay, said: “The RBI dividend is in line with our expectations. Profits from record total foreign exchange sales in 2023 will be the main driver of the bumper surplus, although the profit will be partially offset by higher provisioning for MTM losses (price market value) for foreign securities. Besides, CRB is 6% higher on balance sheet compared to 5.5% previously also eating into profit. Dividends can bring in additional revenue of around 0.2% of GDP.”
The RBI Central Council, in its meeting, considered the global and domestic economic situation and related challenges including the impact of current global geopolitical developments, according to a statement of the RBI. The Board also discussed the Reserve Bank’s performance in fiscal year 23 and adopted the annual report and accounts for the 2022-23 accounting year.