RBI to transfer record ₹2.69 trillion surplus to govt

Contingent Risk Buffer range widened; Centre's fiscal maths get a booster

- MANOJIT SAHA & ANJALI KUMARI

The central board of the Reserve Bank of India (RBI) on Friday approved a record ₹2.69 trillion surplus transfer to the government for the financial year 2024-25, even after maintaining the contingent risk buffer at 7.5 per cent—the upper end of a new range it approved following a review of the RBI's economic capital framework (ECF).

The board decided to expand the central bank's contingent risk buffer or CRB range from 5.5-6.5 per cent of the balance sheet followed for the five years ending 2023-24, to 4.5-7.5 per cent, that is, 6 per cent +/- 1.5 per cent of its balance sheet.

This is the second year in a row that the RBI has transferred a record surplus to the Centre. In 2023-24, the RBI had transferred ₹2.11 trillion while maintaining the buffer at 6.5 per cent.

The transferable surplus of RBI for any year is arrived at on the basis of the ECF adopted by the central bank in 2019, as per the recommendations of the Expert Committee to Review the extant ECF of the Reserve Bank of India, chaired by former RBI governor Bimal Jalan.

The framework was reviewed after five years as mandated by the Jalan Committee.

"Based on the revised Economic Capital Framework, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent," the RBI said in a statement.

Despite an increase in the risk buffer, the central bank was able to transfer a higher surplus as it booked profits on heavy dollar sales in the previous financial year. The central bank undertook gross sales of $399 billion in the 2024-25 or FY25, compared to $153 billion in FY24.