It’s raining dividends this earnings season, and one key payout that the government will be watching for is from Mint Street. India’s central bank is expected to transfer a record surplus of Rs 3 trillion for FY26. The payout is likely to be formally approved and announced at the RBI’s board meeting scheduled for Friday, May 22.
The actual payout amount will be announced at the May 22 meeting. However, most economists’ forecasts indicate the number closer to Rs 3 trillion for FY26. If approved, this would surpass last fiscal year’s payout of Rs 2.7 trillion.
“The surplus, driven by forex operations, elevated global interest rates, and rising gold prices, could help reduce government borrowing pressure and support overall market sentiment,” said Amit Pabari, Managing Director at CR Forex Advisors.
Government finances to get a boost
The forecasted Rs 3 trillion surplus transfer from the central bank, often referred to as the RBI dividend, is expected to support the Centre’s finances, as the government had already factored in Rs 3.16 trillion from dividends of state-run companies and transfers from the central bank for FY27.
The RBI dividend is considered a crucial non-tax revenue source for the government, as it helps ease fiscal pressure. This surplus amount is determined under the revised Economic Capital Framework (ECF), which mandates the contingency buffer within the range of 4.5% to 7.5% of the RBI’s balance sheet.
In FY25, the central bank had raised the CRB to 7.5% from 6.5% in FY24. “We estimate a surplus transfer of Rs 2.8 lakh crore, assuming a CRB at 6.5%,” Economic Times quoted Sakshi Gupta, principal economist at HDFC Bank, as saying.
Analysts project varied payout estimates
Banking company Barclays expects the payout to be near Rs 3 lakh crore, while analysts at Emkay Global Financial Services forecast the surplus within Rs 2.8-3.4 lakh crore, citing that it depends on the amount of buffer maintained by the RBI, the report added.
IDFC First Bank economist Gaura Sengupta says the earnings from foreign exchange transactions are expected to be lower, with gross dollar sales at $166 billion in FY26 (till February), in contrast to $399 billion in dollar sales carried out in FY25.
The economist adds that the historical cost of dollar acquisition was 84 in FY26 in comparison to 82 in FY25, which remains below the current spot rate.