The report noted that this significant surplus transfer was largely supported by the RBI’s active participation in the foreign exchange market. In fact, the RBI was the largest seller of foreign exchange reserves among Asian central banks in January 2025.
It said “This surplus payout is driven by robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income”. The central bank took aggressive steps to stabilize the rupee during the year, including large-scale dollar sales. In September 2024, India’s foreign exchange reserves had peaked at USD 704 billion. Following that, the RBI sold a large volume of dollars to maintain currency stability.
Gross dollar sales during the current financial year, till February 2025, stood at a massive USD 371.6 billion, much higher than USD 153 billion recorded in the previous year (FY24). This aggressive selling helped the RBI book substantial foreign exchange gains, which added to the surplus.
Additionally, the RBI earned more income from its rupee securities. The central bank’s holdings in rupee securities rose by Rs 1.95 lakh crore to Rs 15.6 lakh crore as of March 2025. Although a decline in government securities (G-sec) yields impacted the mark-to-market (MTM) gains on these holdings, the overall interest income saw a steady rise.The report further highlighted the RBI’s prudent approach in maintaining financial stability. While the dividend payout stands at Rs 2.7 trillion, it could have exceeded Rs 3.5 trillion if not for the RBI’s decision to increase its risk buffer.
The Contingent Risk Buffer (CRB), which acts as a safeguard against future risks, was maintained within a range of 7.5 per cent to 4.5 per cent of the RBI’s balance sheet, as recommended by the central board.
The transferable surplus was calculated under the revised Economic Capital Framework (ECF), approved by the RBI’s Central Board during its meeting on May 15, 2025.
This large payout is a windfall for the government. The Union Budget for 2025-26 had projected a total dividend income of Rs 2.56 lakh crore from the RBI and public sector financial institutions. With this latest transfer, the actual amount will be much higher than the budget estimates.
