RBI's higher dividend payments might continue in FY25: SBI report

According to the report authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, this will happen because US yields continuing at above 4% will imply asset income boost for RBI as well as bolstering foreign exchange reserves through $ buying.

Thus, there is a large probability of RBI dividend being healthy in FY25 as well and may even be closer to Rs 2.1 trillion, the report said.

“It may be noted that a rate cut by Fed towards September could fuel a rally in currency against the dollar,” the report added.

The RBI annual report 2023-24 has revealed that the RBI surplus evolved on unexpected lines and the Annual Report also shows that domestic income was flat for FY24 as expected.

The sharpest increase in income was from foreign sources registering a growth of 71% from the level in FY23.

On the expenses side, the major factor that decides the quantum of transferable surplus is the provision towards contingency funds (CF).

An amount of Rs 42,819.91 crore was also provided towards CF to maintain the Available Realised Equity at the level of 6.50 per cent of the size of the balance sheet.

This provision towards CF was substantially lower than what was done last year.

Since the transfer of surplus is dependent on meeting dual objective of maintaining contingency risk buffer between 5.5-6.5% and economic capital between 20.8-25.4% of total balance sheet, the required dual condition was comfortably met by making a provision of Rs 42,819.91 crore in CF in FY24 leading to a higher transfer of surplus in FY24.