Every May the RBI's Central Board approves one number that the Finance Ministry watches closely: the surplus transfer to the Central Government. On 22 May 2026 that number was a record ₹2,86,588.46 crore for 2025-26, about 43% of all the non-tax revenue the Centre has budgeted for 2026-27. The papers call it a "dividend", but legally it is the balance of the RBI's profits, which Section 47 of the RBI Act says must be paid to the government once provisions are made. The real argument is over those provisions: how much the RBI should keep as a buffer against losses before it hands over the rest. This part explains where the surplus comes from, how the Malegam (2013) and Bimal Jalan (2019) committees and the 2025 review shaped the rules, the year-by-year record since 2013-14, the effect on the Union Budget, the old interim-dividend debate, and how other central banks do it.
The RBI's balance sheet, its income statement and the Economic Capital Framework (ECF) are covered line by line in Part 13, the RBI balance sheet. This part focuses on the transfer itself and what it means for the government's finances. For the RBI's ownership and functions, see Part 1 and Part 2.
In the news
- 25 August 2026: The RBI dividend dominates first-quarter receipts. The RBI Bulletin's table on Union Government accounts showed non-tax revenue of ₹3,77,664 crore in April–June 2026, already 56.7% of the full-year Budget estimate, while the fiscal deficit was only 18.2% of its target. Why it matters for the exam: the surplus arrives in a single payment early in the fiscal year, so it flatters the first-quarter fiscal numbers.
- 29 May 2026: Annual Report 2025-26 released. Chapter XII showed gross income of ₹4,27,684.15 crore, up 26.4%, with ₹1,68,906.37 crore of exchange gains on foreign exchange transactions, the largest single item. Why it matters for the exam: realised gains on the RBI's dollar sales count as income and so flow to the government; unrealised revaluation gains do not.
- 22 May 2026: Record surplus of ₹2,86,588.46 crore. The 623rd meeting of the Central Board, chaired by Governor Sanjay Malhotra, approved the transfer for 2025-26. It provided ₹1,09,379.64 crore to keep the Contingent Risk Buffer (CRB) at 6.5% of the balance sheet, down from 7.5% a year earlier. Why it matters for the exam: 2025-26 is the third record in a row, after ₹2,10,874 crore for 2023-24 and ₹2,68,590.07 crore for 2024-25.
- 22 May 2026: Economists say the payout will not prevent slippage. ICRA's Aditi Nayar expected the 2026-27 fiscal deficit to exceed the 4.3% target by about 40 bp, and Bank of Baroda's Madan Sabnavis by 40–50 bp, mainly because of higher fuel and fertiliser costs. Why it matters for the exam: a large RBI transfer helps the deficit but cannot offset a big rise in subsidies on its own.
- 13 May 2026: A record payout expected. PTI reported that the government expected the RBI's highest-ever transfer, to help it absorb the cost of the West Asia crisis. Why it matters for the exam: the government cannot set the amount; the RBI's Board decides it under the ECF.
- 1 February 2026: Budget 2026-27 pegs dividends at ₹3.16 lakh crore. The Receipt Budget put "Dividend/Surplus of Reserve Bank of India, Nationalised Banks & Financial Institutions" at ₹3,16,000 crore for 2026-27. It also raised the 2025-26 figure from ₹2,56,000 crore (Budget estimate) to ₹3,04,590 crore (revised estimate) after the record RBI payout of May 2025. Why it matters for the exam: the ₹3.16 lakh crore covers the RBI and public sector banks and financial institutions, not the RBI alone.
The law: Section 47 and the government as sole owner
What Section 47 says
The RBI has been wholly owned by the Central Government since it was nationalised on 1 January 1949. Its share capital is just ₹5 crore (Section 4), and the government also transferred ₹5 crore of securities to its Reserve Fund (Section 46), which now stands at ₹6,500 crore. As the only shareholder, the government gets the profits.
Section 47, "Allocation of surplus profits", reads: "After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and for all other matters for which provision is to be made by or under this Act or which are usually provided for by bankers, the balance of the profits shall be paid to the Central Government."
Three points follow from the text:
- "Shall be paid": the transfer is not a voluntary dividend. Whatever remains after provisions must go to the government.
- "Usually provided for by bankers": the RBI decides what provisions are prudent. This phrase is the legal home of the Contingency Fund and of the whole Economic Capital Framework.
- No income tax: under Section 48, the RBI does not pay income tax or super-tax on its income, profits or gains. The government gets the profit directly, as a surplus, instead of as tax.
Before the surplus is struck, the RBI also credits four statutory funds (rural, industrial and housing credit funds under Sections 46A, 46C and 46D) with a token ₹4 crore a year in all. That is why its net income for 2025-26 was ₹2,86,592.46 crore but the transfer was ₹2,86,588.46 crore.
Where the surplus comes from
The RBI is not run for profit. Its income is a by-product of its policy work: it issues currency and holds reserves, and the assets bought with that money earn a return. The 2025-26 accounts show four main sources.
| Income, 2025-26 | ₹ crore | Share |
|---|---|---|
| Interest on foreign securities and deposits (net) | 1,35,215.25 | 31.6% |
| Exchange gains on foreign exchange transactions | 1,68,906.37 | 39.5% |
| Interest from domestic sources (net) | 1,00,364.54 | 23.5% |
| Other foreign income (amortisation, gains on sale, miscellaneous) | 23,533.92 | 5.5% |
| Other domestic income | −335.93 | −0.1% |
| Total income | 4,27,684.15 | 100% |
1. Interest on foreign assets
Most of India's forex reserves are invested in foreign government bonds and deposits with other central banks and the BIS. In 2025-26 these earned ₹1,35,215.25 crore: ₹1,07,678.67 crore on securities and ₹27,407.16 crore on deposits. See India's forex reserves for how the reserves are built.
2. Gains on selling foreign exchange
When the RBI sells dollars to steady the rupee, it books a profit if it sells them for more rupees than it paid. The RBI values its dollar holdings at a weighted average cost, so in a year when the rupee is weak and the RBI is a heavy seller, the gain is large. This item was ₹1,11,143.38 crore in 2024-25 and ₹1,68,906.37 crore in 2025-26, and it is the main reason the transfers since 2023-24 have been so big. Note that only realised gains count. Unrealised gains from revaluing gold and foreign currency go to the Currency and Gold Revaluation Account (CGRA), which rose to ₹21,68,530.23 crore on 31 March 2026, and are never paid out. Exchange rate management covers the intervention itself.
3. Interest on domestic assets
The RBI holds government securities bought through open market operations, and it earns interest on repo and MSF lending. In 2025-26 interest on rupee securities was ₹1,17,739.57 crore, up from ₹85,524.67 crore after heavy OMO purchases (see open market operations). Against this, the RBI pays banks when it absorbs liquidity: net LAF interest was −₹8,681.73 crore and SDF interest −₹10,599.55 crore. When the system has surplus liquidity, the RBI's domestic income falls.
4. Seigniorage
Seigniorage is the profit from issuing money. A ₹500 note costs a few rupees to print, but it is a liability on which the RBI pays no interest, while the assets bought with it earn interest. In 2025-26 note printing cost only ₹4,875.20 crore, against notes in circulation of over ₹41 lakh crore. Seigniorage does not appear as a separate line; it is built into the interest income above. Because currency is interest-free and makes up about 45% of the RBI's liabilities, the RBI earns money even in years when other central banks lose it. See currency in circulation.
From income to surplus
Expenditure in 2025-26 was ₹1,41,091.69 crore, but ₹1,09,379.64 crore of that was the risk provision to the Contingency Fund. Operating costs (employees, printing, agency commission to banks and so on) were only about ₹31,712 crore.
Provisions and the Contingent Risk Buffer
Why the RBI keeps a buffer
A central bank can lose money: a sharp rise in the rupee cuts the rupee value of the reserves, bond prices can fall, and emergency support can go bad. The RBI keeps two kinds of buffer:
- Realised equity: capital, the Reserve Fund, the Contingency Fund (CF) and the Asset Development Fund. It is built from retained profits and can absorb any loss. The share of the balance sheet that this realised equity must cover is the Contingent Risk Buffer (CRB).
- Revaluation balances (the CGRA and other revaluation accounts): unrealised gains that can absorb only market risk.
Each rupee added to the CF is a rupee less for the government. The level of the CRB is therefore the main control on the size of the transfer. Part 13 shows how the CF moved in 2025-26.
The CRB in numbers
On 31 March 2026 the balance sheet was ₹91,97,121.08 crore. At 6.5%, required realised equity was ₹5,97,812.87 crore. Each 1 percentage point of CRB is therefore worth about ₹91,971 crore of surplus.
Three committees, three answers
Before 2013: the RBI kept a large share
Until 2012-13 the RBI kept a large part of its income in its reserves. Only 37.2% of the surplus was transferred in 2011-12 and 53.4% in 2012-13 (₹33,010 crore). The rest went into the Contingency Reserve and the Asset Development Reserve.
The Malegam committee (2013)
In 2013-14 the RBI set up a Technical Committee of the Central Board chaired by Y.H. Malegam, a Board member, to review "the level and adequacy of internal reserves and surplus distribution policy". It found that the reserve balances were already "in excess of the buffers needed" and recommended no further transfers to them for the time being.
The effect was immediate. In 2013-14 the RBI transferred 99.99% of its surplus, ₹52,679 crore, which the Annual Report called "the largest ever surplus transfer by the Reserve Bank". The full-transfer approach continued until 2015-16: nothing was added to the Contingency Fund in those three years, while it was drawn on to absorb losses. In 2016-17 the RBI began topping it up again (₹13,140 crore), which, together with demonetisation costs, halved the transfer to ₹30,659 crore.
The Bimal Jalan committee (2019)
By 2018 the government and the RBI disagreed openly over how large the RBI's reserves should be. After its meeting of 19 November 2018, the Central Board decided to set up an Expert Committee to Review the Extant Economic Capital Framework, in consultation with the government. Its members were:
- Dr Bimal Jalan (chair), former Governor;
- Dr Rakesh Mohan (vice-chair), former Deputy Governor;
- Bharat N. Doshi and Sudhir Mankad;
- Rajiv Kumar, Finance Secretary;
- N.S. Vishwanathan, Deputy Governor.
The main recommendations:
- Separate the two kinds of capital. Realised equity covers all risks; revaluation balances cover market risk only and are never distributed.
- CRB of 5.5% to 6.5% of the balance sheet, held as realised equity. The CRB was only 2.4% on 30 June 2018 on the committee's measure, which shows how much it depended on revaluation balances before.
- Market risk measured by Expected Shortfall, with a risk tolerance limit at the 97.5% confidence level.
- A surplus distribution policy that targets realised equity. If realised equity is above the upper bound, all net income goes to the government. Within the range, the Board decides. Below the lower bound, the RBI provisions first and transfers only the residual.
- Change the accounting year from July–June to April–March from 2020-21.
- Interim dividends "only under exceptional circumstances".
- Review the framework every five years.
The Board accepted the report on 26 August 2019 and set the CRB at the lower bound of 5.5%. This released ₹52,637 crore of excess risk provisions from the CF. Added to the 2018-19 surplus of ₹1,23,414 crore, the total was ₹1,76,051 crore (often written ₹1.76 lakh crore). Of this, ₹28,000 crore had already been paid as an interim surplus during the year, so the balance paid after the meeting was ₹1,48,051 crore. The Annual Report records the transfer for 2018-19 as ₹1,75,987.73 crore.
The 2025 revision
The five-year review was done internally. The Central Board approved a revised ECF on 15 May 2025, and it was applied to the 2024-25 accounts. The key changes were:
- CRB widened to 6.0% ± 1.5%, that is 4.5% to 7.5% of the balance sheet (from 5.5–6.5%).
- The Board can set market-risk buffers anywhere between Expected Shortfall at 97.5% and 99.5% confidence.
- Realised equity above the upper bound is written back to income. If it falls below the lower bound, no surplus is transferred until it is restored.
The Board immediately went to the top of the new range: 7.5% for 2024-25, which needed a provision of ₹44,861.70 crore. A year later it came back to 6.5%. The wider range gives the Board more room in both directions: it can build buffers in a good year and release them in a bad one. Part 13 covers the 2025 framework in detail.
The record: transfers year by year
| Accounting year | RBI year | Surplus transferred (₹ crore) | Notes |
|---|---|---|---|
| 2013-14 | Jul–Jun | 52,679 | Malegam: 99.99% of surplus transferred |
| 2014-15 | Jul–Jun | 65,896 | |
| 2015-16 | Jul–Jun | 65,876 | |
| 2016-17 | Jul–Jun | 30,659 | Demonetisation costs; ₹13,140 crore to CF |
| 2017-18 | Jul–Jun | 50,000 | Includes ₹10,000 crore interim |
| 2018-19 | Jul–Jun | 1,75,988 | Jalan: includes ₹52,637 crore excess provisions; ₹28,000 crore interim |
| 2019-20 | Jul–Jun | 57,128 | ₹73,615 crore provided to CF |
| 2020-21 | Jul–Mar (9 months) | 99,122 | Transition to April–March |
| 2021-22 | Apr–Mar | 30,307 | CRB 5.5% |
| 2022-23 | Apr–Mar | 87,416 | CRB 6.0% |
| 2023-24 | Apr–Mar | 2,10,874 | CRB 6.5% |
| 2024-25 | Apr–Mar | 2,68,590.07 | CRB 7.5%, revised ECF |
| 2025-26 | Apr–Mar | 2,86,588.46 | CRB 6.5%; approved 22 May 2026 |
Three patterns stand out:
- The big jumps come from rules, not just income. 2013-14 followed Malegam, 2018-19 followed Jalan.
- The dips come from provisions or policy costs. In 2016-17 it was demonetisation; in 2019-20 a ₹73,615 crore CF provision; in 2021-22 total expenditure, including provisions, was ₹1,29,800.68 crore.
- Foreign exchange gains have driven the latest records: ₹1,11,143.38 crore in 2024-25 and ₹1,68,906.37 crore in 2025-26, as the RBI sold dollars bought at lower rates.
Accounting year versus Budget year
This is the most common source of confusion. The surplus for an accounting year is paid in the next fiscal year:
- Before 2020, the RBI's year ended on 30 June and the surplus was paid in August. The surplus for 2018-19 (July 2018 to June 2019) was paid in August 2019, in fiscal 2019-20.
- Since 2021, the RBI's year ends on 31 March and the surplus is paid in May. The surplus for 2025-26 was paid in May 2026 and counts as revenue for fiscal 2026-27.
The surplus in the Budget's maths
Where it sits
In the Budget the RBI transfer is part of non-tax revenue, under "Dividends and Profits". The Receipt Budget head is "Dividend/Surplus of Reserve Bank of India, Nationalised Banks & Financial Institutions", which also includes dividends from public sector banks and financial institutions. Dividends from other public sector enterprises are shown separately.
| ₹ crore | 2024-25 (Actual) | 2025-26 (BE) | 2025-26 (RE) | 2026-27 (BE) |
|---|---|---|---|---|
| Dividend/surplus of RBI, banks and FIs | 2,34,284.60 | 2,56,000 | 3,04,590 | 3,16,000 |
| RBI surplus received in the year | 2,10,874 | — | 2,68,590 | 2,86,588 |
| Total non-tax revenue | 5,36,580 | 5,83,000 | 6,67,662 | 6,66,228 |
| Fiscal deficit | 15,74,431 | 15,68,936 | 15,58,492 | 16,95,768 |
Sources: Receipt Budget 2026-27; Budget at a Glance 2026-27. The RBI line is the transfer approved in May of that fiscal year.
Worked example 1: the share of non-tax revenue
Take the 2026-27 Budget:
- RBI surplus ÷ non-tax revenue = 2,86,588 ÷ 6,66,228 = 43.0%.
- RBI surplus ÷ the whole dividend head = 2,86,588 ÷ 3,16,000 = 90.7%.
The same ratio was 2,10,874 ÷ 5,36,580 = 39.3% in 2024-25 and 2,68,590 ÷ 6,67,662 = 40.2% in 2025-26 (revised estimate). Before 2023, the RBI's share of non-tax revenue was much smaller, because the transfers were much smaller.
Worked example 2: the effect on the fiscal deficit
The fiscal deficit is total expenditure minus revenue receipts minus non-debt capital receipts. Any rupee of surplus lowers it by a rupee, unless the government spends it.
Budget 2026-27 assumes nominal GDP of ₹3,93,00,393 crore and a fiscal deficit of ₹16,95,768 crore (4.3% of GDP).
- The transfer as a share of GDP: 2,86,588 ÷ 3,93,00,393 = 0.73% of GDP.
- The transfer covers 2,86,588 ÷ 16,95,768 = 16.9% of the fiscal deficit.
- Suppose the RBI had paid only the 2024-25 amount (₹2,68,590 crore). Revenue would be ₹17,998 crore lower, the deficit ₹17,13,766 crore, and the ratio 4.36% instead of 4.31%: about 0.05 percentage points of GDP.
The lesson: a difference of ₹18,000 crore in the RBI's payout moves the deficit ratio by only about 5 bp. The headlines in May 2026 that the payout "fell short" of the ₹3.16 lakh crore Budget estimate compared the RBI's transfer with a head that also includes bank dividends. Public sector banks earned a record ₹1.98 lakh crore in 2025-26, so their dividends were expected to make up the rest.
Worked example 3: what the CRB choice was worth
For 2025-26, net income before risk provisions was ₹3,95,972.10 crore.
- The Board provided ₹1,09,379.64 crore to hold the CRB at 6.5%.
- 3,95,972.10 − 1,09,379.64 = ₹2,86,592.46 crore; less ₹4 crore for the statutory funds = ₹2,86,588.46 crore.
- Had the Board kept the CRB at 7.5%, it would have needed about 1% × 91,97,121 = ₹91,971 crore more. The transfer would have been about ₹1,94,617 crore, roughly 0.23% of GDP less.
So the Board's choice of CRB moved more money than any likely change in the RBI's income.
Why the timing matters
The surplus arrives as one payment in May. It gives the government an early cash cushion, and when the money is spent it moves from the government's account at the RBI into banks, adding liquidity. In April–June 2026 non-tax revenue was already 56.7% of the full-year estimate, which is why first-quarter deficit figures always look unusually good.
The interim dividend debate
Before 2019 the RBI's year ended in June, while the government's ended in March. The government therefore had to wait for the surplus of the year ending June, paid in August, and in tight years it asked for part of it early, as an interim surplus before 31 March:
- 2017-18: ₹10,000 crore transferred during the year, part of the total of ₹50,000 crore.
- 2018-19: ₹28,000 crore transferred during the year, part of ₹1,75,988 crore.
Critics said interim payments helped the government meet its year-end deficit target with profits that had not yet been audited. The Jalan committee settled the matter in two ways:
- It aligned the RBI's year with the government's (April–March) from 2020-21, so the full surplus now arrives within two months of the year-end, in May.
- It said interim dividends should be paid "only under exceptional circumstances".
Since the change, the surplus has been approved each May, shortly after the year ends, so the timing gap that interim payments used to fill has gone.
The wider debate
- For larger transfers: capital beyond what is needed earns nothing for the taxpayer, and since the RBI pays no tax, the surplus is how the state captures its profits.
- For larger buffers: a thinly capitalised central bank may need the government to recapitalise it after a loss, which weakens its independence.
- On the fiscal side: large, volatile transfers can mask weak tax revenue.
The ECF is the RBI's answer: a published rule that leaves the Board the final call within a range.
How other central banks do it
Most central banks pay their profits to their governments, but the rules differ. The RBI's 2025 internal review of the ECF lists several:
| Central bank | Rule on profits |
|---|---|
| Bank of England | Target, floor and ceiling for loss-absorbing capital; pays 50% of net profit between the target and the ceiling, 100% above the ceiling |
| Bank of Thailand | Keeps 25% of net profit as reserves |
| Bank Negara Malaysia, Bank of Korea | Keep 30% (Malaysia's rule depends on its General Reserve Fund) |
| Bangko Sentral ng Pilipinas | Distributes 50% of net profit to the government |
| Bank of Canada | Reserve fund share depends on its size relative to paid-up capital |
| Reserve Bank of Australia | Unrealised gains are not distributable |
| Swiss National Bank | At least 10% of profit allocated to provisions each year |
Two contrasts matter for the exam:
- India's rule is a range for realised equity, not a fixed percentage of profit. All net income goes to the government once the CRB is met.
- The RBI did not make losses in the high-rate years of 2022–24, while the review notes that many central banks reported losses "on an unprecedented scale". Its annex lists the US Federal Reserve, the Bundesbank, the Swiss National Bank, the Bank of Canada, the Reserve Bank of Australia and others as having had negative net interest income, valuation losses or negative equity in at least one year between 2020-21 and 2023-24. Those central banks had bought large amounts of bonds with reserves on which they pay interest, so when rates rose their interest costs exceeded their income. Most of the RBI's liabilities are currency, on which it pays no interest.
Common exam traps
- "Dividend" is informal. The legal term is the balance of profits under Section 47. Section 48 exempts the RBI from income tax.
- Accounting year ≠ receipt year. The ₹2,86,588.46 crore is the surplus for 2025-26, received in 2026-27.
- ₹3.16 lakh crore is not the RBI's Budget estimate. It is the estimate for the RBI, nationalised banks and financial institutions together.
- ₹1.76 lakh crore (2019) = ₹1.23 lakh crore surplus + ₹0.53 lakh crore excess provisions. It was for 2018-19, and ₹28,000 crore of it had been paid as an interim surplus.
- CRB ranges: Jalan 5.5–6.5%; 2025 revision 4.5–7.5%. The Board chose 7.5% for 2024-25 and 6.5% for 2025-26.
- 2020-21 was nine months (July 2020 to March 2021). Its ₹99,122 crore is not comparable with a full year.
- Revaluation gains (CGRA) are never transferred. Only realised income counts.
- Malegam (2013) led to full transfers; Jalan (2019) created the ECF. Do not mix them up with the Urjit Patel committee, which was about inflation targeting.
Key facts at a glance
| Legal basis | Section 47, RBI Act, 1934: balance of profits paid to the Central Government |
| Tax | Section 48: RBI pays no income tax |
| Latest transfer | ₹2,86,588.46 crore for 2025-26, approved 22 May 2026 (623rd Board meeting), a record |
| Previous transfers | ₹2,68,590.07 crore (2024-25); ₹2,10,874 crore (2023-24) |
| CRB for 2025-26 | 6.5% of the balance sheet; provision ₹1,09,379.64 crore |
| CRB range | 4.5–7.5% (revised ECF, approved 15 May 2025); earlier 5.5–6.5% (Jalan) |
| Malegam committee | Technical Committee of the Central Board, 2013-14; 99.99% of 2013-14 surplus transferred |
| Jalan committee | Board accepted report 26 August 2019; ₹1,76,051 crore transferred (incl. ₹52,637 crore excess provisions) |
| Accounting year | April–March since 2020-21 (transition year July 2020 to March 2021) |
| Largest income item, 2025-26 | Exchange gains on forex transactions, ₹1,68,906.37 crore |
| Budget 2026-27 | Dividend/surplus head (RBI, banks, FIs) ₹3,16,000 crore; non-tax revenue ₹6,66,228 crore |
| Share of non-tax revenue | RBI transfer about 43% in 2026-27 |
| Fiscal deficit 2026-27 (BE) | ₹16,95,768 crore, 4.3% of GDP |
Exam corner: what to remember
- Section 47 makes the transfer compulsory after provisions; the provisions are the real decision.
- Income sources: interest on foreign assets, forex sale gains, interest on G-secs, and seigniorage built into interest income. Costs: operations, SDF and reverse repo interest, and risk provisions.
- Malegam (2013-14): reserves were enough, so the full surplus was transferred: ₹52,679 crore in 2013-14.
- Jalan (2019): realised equity vs revaluation balances; CRB 5.5–6.5%; set at 5.5%; ₹1,76,051 crore = ₹1,23,414 crore + ₹52,637 crore; April–March year; interim dividends only in exceptional cases; review every five years.
- 2025 revision: CRB 4.5–7.5% (6.0% ± 1.5%); 7.5% for 2024-25; 6.5% for 2025-26.
- Records: ₹2.11 lakh crore (2023-24) → ₹2.69 lakh crore (2024-25) → ₹2.87 lakh crore (2025-26).
- Budget 2026-27: the RBI's transfer is about 43% of non-tax revenue and covers about 17% of the fiscal deficit.
- Current affairs: CRB held at 6.5% in May 2026; non-tax revenue reached 56.7% of target in the first quarter of 2026-27.
For exam-specific syllabus and pattern details, see our pages for RBI Grade B, SBI PO and IBPS PO.
Test yourself
Under which section of the RBI Act is the RBI's surplus transferred to the Central Government?
Show answer
Answer: (d) Section 47 requires the balance of profits, after provisions, to be paid to the Central Government.
On 22 May 2026, the RBI's Central Board approved a surplus transfer for 2025-26 of:
Show answer
Answer: (c) This was a record. (a) and (b) were the transfers for 2023-24 and 2024-25; (d) is the Budget estimate for the whole dividend head.
Under the revised Economic Capital Framework approved in May 2025, the Contingent Risk Buffer must be kept within:
Show answer
Answer: (b) The CRB is now 6.0% ± 1.5%. 5.5–6.5% was the Jalan range; 3.5–6.5% is the monetary and financial stability component alone.
At what level did the Central Board keep the CRB for 2025-26?
Show answer
Answer: (c) It was cut from 7.5% for 2024-25 to 6.5%, which required a provision of ₹1,09,379.64 crore.
The ₹1,76,051 crore transferred after the Jalan committee report consisted of the 2018-19 surplus of ₹1,23,414 crore and excess provisions of:
Show answer
Answer: (b) ₹1,23,414 + ₹52,637 = ₹1,76,051 crore. ₹28,000 crore was the interim surplus paid earlier in the year.
Which committee's recommendations led the RBI to transfer 99.99% of its surplus in 2013-14?
Show answer
Answer: (a) The Malegam technical committee found the RBI's reserves sufficient and advised no further transfers to them.
The RBI's net income before risk provisions for 2025-26 was ₹3,95,972.10 crore and the risk provision was ₹1,09,379.64 crore. After ₹4 crore for statutory funds, the surplus was:
Show answer
Answer: (a) 3,95,972.10 − 1,09,379.64 = 2,86,592.46; less 4 = ₹2,86,588.46 crore.
Budget 2026-27 estimates non-tax revenue at ₹6,66,228 crore. The RBI's transfer of ₹2,86,588 crore is closest to what share of it?
Show answer
Answer: (c) 2,86,588 ÷ 6,66,228 = 43.0%. About 17% is its share of the fiscal deficit, and about 91% its share of the dividend head.
Which of these is never transferred to the government?
Show answer
Answer: (c) The CGRA holds unrealised revaluation gains, which the ECF keeps as a buffer against market risk.
The RBI's 2020-21 accounting year was unusual because it:
Show answer
Answer: (b) It was the transition to an April–March year recommended by the Jalan committee; the surplus was ₹99,122 crore.
Further reading
- Report of the Expert Committee to Review the Extant Economic Capital Framework of the RBI (Bimal Jalan, 2019): the founding document of the current rules, with the reasoning behind the CRB, the surplus distribution policy and the April–March year.
- Economic Capital Framework of the RBI: Internal Review (RBI, May 2025): the 2025 revision, its 4.5–7.5% CRB range and a cross-country annex on how other central banks distribute profits.
- RBI Annual Report 2025-26, Chapter XII: The Reserve Bank's Accounts: the full income statement and the five-year table of income, expenditure and surplus.
- RBI Annual Report 2013-14, Chapter XII: the RBI's own account of the Malegam committee and the first full-surplus transfer.
- Receipt Budget 2026-27: the official line for dividends and surplus of the RBI, banks and financial institutions, with actuals, revised and Budget estimates.
- Reserve Bank of India Act, 1934: Sections 4, 46, 47 and 48 in full.
- RBI Annual Report 2020-21, Chapter XII: the transition to an April–March year and the five-year table from 2016-17.
Sources
- RBI press release, 22 May 2026: 623rd meeting of the Central Board: surplus of ₹2,86,588.46 crore for 2025-26; CRB 6.5%; ₹1,09,379.64 crore to CRB against ₹44,861.70 crore in 2024-25; net income before provisions ₹3,95,972.10 crore; balance sheet ₹91,97,121.08 crore; ECF range 4.5–7.5% (accessed 24 October 2026)
- RBI press release, 23 May 2025: 616th meeting of the Central Board: ₹2,68,590.07 crore for 2024-25; revised ECF approved 15 May 2025; CRB range 4.5–7.5%; CRB history 5.5% (2018-19 to 2021-22), 6.0% (2022-23), 6.5% (2023-24), 7.5% (2024-25) (accessed 24 October 2026)
- RBI Annual Report 2025-26, Chapter XII: income and expenditure items for 2024-25 and 2025-26; surplus transferred 2021-22 to 2025-26; CF and CGRA balances; statutory fund transfers (accessed 24 October 2026)
- RBI Annual Report 2020-21, Chapter XII: surplus transferred 2016-17 to 2020-21; nine-month 2020-21 year; ₹73,615 crore CF provision in 2019-20 (accessed 24 October 2026)
- RBI Annual Report 2016-17, Chapter XI: surplus transferred 2012-13 to 2016-17; ₹13,140 crore CF provision and demonetisation costs in 2016-17 (accessed 24 October 2026)
- RBI Annual Report 2013-14, Chapter XII: Malegam technical committee and its findings; 99.99% transferred in 2013-14 vs 37.2% (2011-12) and 53.4% (2012-13) (accessed 24 October 2026)
- RBI Annual Report 2018-19, Chapter XII: 2018-19 surplus of ₹1,234.14 billion plus ₹526.37 billion write-back; ₹280 billion interim; ₹100 billion interim in 2017-18; Board meetings of 19 November 2018 and 26 August 2019 (accessed 24 October 2026)
- RBI press release, 26 August 2019: Board accepts the Jalan committee recommendations; ₹1,76,051 crore including ₹52,637 crore of excess provisions (accessed 24 October 2026)
- RBI, Report of the Expert Committee to Review the Extant Economic Capital Framework (2019): members, recommendations, CRB of 5.5–6.5%, CRB of 2.4% in June 2018, interim dividends only in exceptional circumstances, five-year review (accessed 24 October 2026)
- RBI, Economic Capital Framework: Internal Review (2025): CRB 6.0 ± 1.5%; ES range; write-back and no-transfer rules; cross-country profit distribution practices and central bank losses (accessed 24 October 2026)
- Reserve Bank of India Act, 1934: text of Sections 4, 46, 46A–46D, 47 and 48 (accessed 24 October 2026)
- Receipt Budget 2026-27: dividend/surplus of RBI, nationalised banks and FIs: ₹2,34,284.60 crore (2024-25 actual), ₹2,56,000 crore (2025-26 BE), ₹3,04,590 crore (2025-26 RE), ₹3,16,000 crore (2026-27 BE) (accessed 24 October 2026)
- Budget at a Glance 2026-27: non-tax revenue, fiscal deficit and GDP of ₹3,93,00,393 crore for 2026-27 (accessed 24 October 2026)
- RBI Bulletin, August 2026: Union Government Accounts: April–June 2026 non-tax revenue ₹3,77,664 crore (56.7% of BE), fiscal deficit 18.2% of BE (accessed 24 October 2026)
- Business Today, 22 May 2026: RBI dividend will help but Centre's finances to remain under pressure: ICRA and Bank of Baroda views on fiscal slippage (accessed 24 October 2026)
- Business Today, 22 May 2026: record surplus falls short of Budget target: ₹3.16 lakh crore Budget estimate comparison (accessed 24 October 2026)
- Outlook Business (PTI), 13 May 2026: expectation of a record dividend; PSB net profit of ₹1.98 lakh crore in 2025-26 (accessed 24 October 2026)
- Business Standard, 21 May 2022: ₹30,307 crore for 2021-22 with CRB at 5.5% (accessed 24 October 2026)
- Business Standard, 19 May 2023: ₹87,416 crore for 2022-23 with CRB at 6% (accessed 24 October 2026)