Reserve Bank Of India / New government will get a gift of Rs 2.11 lakh crore from RBI

Vikrant Shekhawat : May 23, 2024, 08:25 AM
Reserve Bank Of India: The Reserve Bank of India (RBI) on Wednesday approved dividend payment of Rs 2.11 lakh crore to the Central Government for the financial year 2023-24. This will be the highest ever dividend from the central bank. This is more than double compared to a year ago. For the financial year 2022-23, RBI had given a dividend of Rs 87,416 crore to the government. The previous highest level was in the financial year 2018-19 when the Reserve Bank gave a dividend of Rs 1.76 lakh crore to the government.

This much dividend approved

The decision to pay the dividend was taken in the 608th meeting of the Central Board of Directors of RBI held under the chairmanship of Governor Shaktikanta Das. The Reserve Bank said in the statement that the Board of Directors approved the transfer of Rs 2,10,874 crore as surplus to the Central Government for the financial year 2023-24. In the budget of the current financial year, the government had estimated a total dividend income of Rs 1.02 lakh crore from RBI and public sector financial institutions.

Government will get a lot of help

Receiving more dividends than expected will help the government in reducing fiscal deficit. The central government has set a target of limiting the fiscal deficit, the difference between its expenditure and revenue, to 5.1 percent of the gross domestic product (GDP) in the financial year 2024-25. The RBI Board of Directors also reviewed the risks associated with the growth outlook and the global and domestic economic outlook. Apart from this, the functioning of the Reserve Bank during the financial year 2023-24 was discussed in the meeting and its annual report and financial statements for the last financial year were approved.

CRB was made 6 percent

RBI said that in view of the macroeconomic conditions and the outbreak of the Covid-19 pandemic, it was decided to maintain the Contingent Risk Buffer (CRB) at 5.50 per cent between the financial years 2018-19 to 2021-22. This was expected to support growth and overall economic activity.

RBI said that CRB was increased to 6 percent if there is revival in economic growth in the financial year 2022-23. Due to the continued strength and resilience of the economy, the Board of Directors has decided to increase the CRB to 6.50 percent for the financial year 2023-24.

RBI said that the decision regarding the dividend amount payable for the financial year 2023-24 has been taken on the basis of the Economic Capital Framework (ECF) adopted in August, 2019. The expert committee headed by Bimal Jalan had recommended ECF. The committee had said that the risk provision under CRB should be kept in the range of 6.5 to 5.5 percent of the RBI's book.