RBI board approves dividend payment of ₹2,86,588 crore to government

📌 Summary:

• The Reserve Bank of India's Central Board of Directors on May 22, 2026 approved the transfer of a surplus of ₹2,86,588.46 crore to the Central Government as dividend for the accounting year 2025-26.

• The decision factored in current macroeconomic conditions, the Bank's financial performance, and the need to maintain appropriate risk buffers.

• The board transferred ₹1,09,379.64 crore to the Contingent Risk Buffer (CRB) for FY26 — up sharply from ₹44,861.70 crore the previous year — and kept the CRB at 6.5% of the size of the RBI balance sheet.

• RBI gross income rose 26.42% over the previous year, while expenditure before risk provisions rose 27.6%.

• Net income before risk provision and transfer to statutory funds was ₹3,95,972.10 crore in FY26, up from ₹3,13,455.77 crore in FY25.

• The RBI balance sheet expanded 20.61% to ₹91,97,121.08 crore as on March 31, 2026.

• The decision was taken at the 623rd board meeting in Mumbai, chaired by Governor Sanjay Malhotra; the revised Economic Capital Framework (ECF) allows the CRB to be maintained within 4.5-7.5% of the balance sheet size.

🎯 UPSC Relevance: GS3 (Indian Economy) — government budgeting and non-tax revenue; the RBI surplus-transfer mechanism and its fiscal significance; the Economic Capital Framework and central-bank risk buffers.

📝 Prelims Facts:

• RBI surplus/dividend transfer for FY26: ₹2,86,588.46 crore.

• Contingent Risk Buffer kept at 6.5% of the balance sheet; the ECF permits a 4.5-7.5% range.

• The RBI surplus transfer to the government is governed by Section 47 of the RBI Act, 1934.

• The Economic Capital Framework was adopted on the recommendations of the Bimal Jalan Committee.

🔑 Key Term: Contingent Risk Buffer (CRB) — a specific provision within the RBI's Economic Capital Framework, set aside to cover monetary, financial stability and operational risks.