RBI Set To Transfer Record ₹2.5–3 Lakh Crore Dividend To Government, Spurs Short-Term Bond Rally

In a major boost to the Centre’s finances, the Reserve Bank of India (RBI) is likely to transfer a record dividend of ₹2.5–3 lakh crore to the government, analysts said on Wednesday. The news triggered a rally in short-term bonds.

The expected RBI dividend marks a sharp rise from last year’s ₹2.1 lakh crore transfer.

“The dividend may exceed the FY26 budgeted estimate of ₹2.6 lakh crore from the RBI, nationalised banks, and financial institutions combined,” said Rajani Sinha, Chief Economist at CareEdge Ratings. She noted that gains from dollar sales likely drove this rise.

Gross dollar sales soared to $371.6 billion up to February in FY25, compared to $153 billion for all of FY24. The difference between the historical dollar purchase prices and recent sales rates helped fuel these gains.

Sinha added that interest income from rupee and foreign securities may have also supported the higher dividend.

In FY25, the ₹2.1 lakh crore transfer helped the government rein in its fiscal deficit. It also enabled spending on infrastructure and welfare schemes. This was a steep rise from the ₹87,416 crore transferred in FY24.

According to Radhika Rao, Senior Economist at DBS Bank, “Earnings from forex transactions and interest income on government securities could push the transfer to a record ₹2.5–2.7 lakh crore.”

Higher-than-budgeted RBI surplus and reduced spending elsewhere have strengthened the government’s fiscal position. This could help tackle growth slowdown risks and emergency spending needs effectively.

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