RBI Dividend To Government: Rs 30,307 cr for FY22; down from 2nd highest payout ever of Rs 99,122 cr paid previous year

Down from the second highest payout ever of Rs 99,122 crore paid in the previous year, Reserve Bank of India (RBI) will pay the government Rs 30,307 crore as dividend for the fiscal year ended March 31, a PTI report confirmed.

RBI said in a statement said the board approved the transfer of Rs 30,307 crore as surplus to the central government for the accounting year 2021-22 while deciding to maintain the Contingency Risk Buffer at 5.50 per cent.

The decision on the dividend payment was taken in the 596th meeting of the Central Board of Directors of RBI, headed by Governor Shaktikanta Das, held on Friday.

The meeting of the Central Board was attended by Deputy Governors Mahesh Kumar Jain, Michael Debabrata Patra, M Rajeshwar Rao and T Rabi Sankar. Other Directors of the Central Board, Satish K Marathe, S Gurumurthy, Revathy Iyer and Sachin Chaturvedi also attended the meeting. Sanjay Malhotra Secretary, Department of Financial Services and Ajay Seth, Secretary, Department of Economic Affairs too attended the meeting. 

Dividend last year

Last year in May, RBI declared a dividend of Rs 99,122 crore for the nine-month period (July 2020 to March 2021). 

The dividend was paid for that period as RBI aligned its financial year with the government's financial year.

Earlier, RBI used to follow July-June period earlier as against government's April-March financial year.

For the current fiscal, the government had estimated a receipt of Rs 73,948 crore as dividend revenue from the central bank and public sector financial institutions. This is 27 per cent lower than the Rs 1.01 lakh crore received in FY22.

During its meeting, the board also reviewed the current economic situation, global and domestic challenges and the impact of recent geopolitical developments.

Further, the board discussed the working of RBI during the year April 2021 ? March 2022 and approved the annual report and accounts for the accounting year 2021-22, the statement said.

What down dividend shows?

-RBI's latest dividend is down compared to last year as it may have taken a hit on the income side, with the central bank likely receiving lower interest income from its liquidity management operations.

-In 2018-19, RBI paid a total of Rs 1.76 lakh crore to the government of which Rs 1.23 lakh crore was dividend and Rs 52,637 crore was towards excess provisions identified as per the revised Economic Capital Framework (ECF).

RBI also decided to maintain a Contingency Risk Buffer at 5.50 per cent in line with recommendations of the Bimal Jalan Committee report.

The panel had prescribed a Contingency Risk Buffer range of 6.5 per cent to 5.5 per cent.

(With PTI inputs)