RBI Pays Rs 2.68 Lakh Crore Dividend to Centre; Total Dividend Crosses Rs 11.4 Lakh Crore in 11 Years
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The Reserve Bank of India (RBI) has declared a record high dividend of Rs 2,68,590 crore for the central government for the financial year 2024-25. This announcement comes amid several global challenges, ongoing trade discussions with the United States, and rising defence spending due to tensions with Pakistan.
What Does This Dividend Mean?
The dividend is the money RBI pays to the government from its profits. This year’s amount is higher than what both the government and analysts expected. Earlier, during the Union Budget speech on February 1, 2025, Finance Minister Nirmala Sitharaman had estimated a dividend of Rs 2.56 lakh crore, while analysts had forecasted around Rs 2.50 lakh crore. The actual amount announced by RBI has exceeded these estimates, showing the strong financial position of the central bank.
RBI Dividend Over the Last 11 Years
The RBI has been paying dividends to the government regularly. Over the past 11 years, the total dividends received by the government now add up to about Rs 11.42 lakh crore during Prime Minister Modi’s tenure.
Here is a summary of the dividends declared over the years:
| Financial Year | Dividend (in Crores) |
|---|---|
| 2014-15 | 65,896 |
| 2015-16 | 65,876 |
| 2016-17 | 30,659 |
| 2017-18 | 50,000 |
| 2018-19 | 1,76,051 |
| 2019-20 | 57,128 |
| 2020-21 | 99,122 |
| 2021-22 | 30,307 |
| 2022-23 | 87,416 |
| 2023-24 | 2,10,874 |
| 2024-25 | 2,68,590 |
| Total | 11,41,919 |
How Was This Decision Made?
The dividend decision was made during the 616th meeting of the RBI Central Board, which was led by RBI Governor Sanjay Malhotra. This large dividend payout will help the government reduce its fiscal deficit to 4.4%, lower the amount it needs to borrow, and bring down bond yields.
Along with the dividend, RBI has increased its Contingent Risk Buffer (CRB) from 6.5% to 7.5%, strengthening its financial safety net.
Why Is RBI Able to Give Such a High Dividend?
The main reason for this record dividend is RBI’s strong financial health. This strength comes from several sources:
- Selling foreign exchange reserves
- Gains from foreign exchange rate changes
- Interest earned from government securities
In September 2024, India’s foreign exchange reserves reached an all-time high of $704 billion. Since then, RBI has sold over $125 billion of foreign currency. Among Asian central banks, RBI has been the largest seller of foreign exchange.
In 2024-25, the total gross dollar sales by RBI reached $371.6 billion up to February, which is more than double the $153 billion sold during the same period last year.
By March 2025, the value of securities held by RBI in Indian rupees rose to Rs 15.6 lakh crore, showing growth compared to the previous year.
New Payment Regulatory Board to Oversee Payment Systems
In a related development, the RBI has notified the formation of a new Payment Regulatory Board (PRB) on May 21, 2025. This six-member board will monitor and regulate payment systems in India. The PRB will replace the existing Board of Payment-Settlement System Regulation and Supervision (BPSS).
Key points about the Payment Regulatory Board:
- Headed by the RBI Governor
- Deputy Governor will be responsible for payment and settlement systems
- Includes three members nominated by the central government
- RBI officials nominated by the Central Board will also be members
- Every member has one vote
- The RBI Governor, Deputy Governor, and RBI officials will be ex-officio members
This new board will ensure better oversight and regulation of payment systems, contributing to the country’s financial stability.
