NEW DELHI: The Reserve Bank of India's (RBI) central board of directors is expected to meet on May 23 to conduct its annual review of the central bank's balance sheet and discuss the transfer of surplus funds for FY25 to the government. The payout could be as high as Rs 3 lakh crore, exceeding last year's dividend by nearly 50%.
The board also met on May 15 to review the Economic Capital Framework (ECF), a crucial factor in determining the surplus or the dividend.
"We estimate an RBI dividend of Rs 2.6 lakh to Rs 3 lakh crore, depending on the level of provisioning," said Gaura Sen Gupta, chief economist at IDFC First Bank, according to a report by ET.
"The markets have largely factored in a dividend of approximately Rs 2.5 lakh crore. Any upside on the number would have an impact on bond yields," said Alok Singh, group treasury head at CSB Bank.
Contingency provisions are anticipated to be on par with or higher than last year. According to IDFC First Bank, provisions amounted to Rs 42,800 crore previously and are expected to range between Rs 40,000 - Rs 80,000 crore this year.
The relevant committee had recommended risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5-5.5% of the RBI's balance sheet.
The size of the CRB is closely linked to the pace of economic growth, as it is determined by the board based on the economy’s performance during the period.
Additionally, the final payout amount also depends on the central bank’s earnings from various domestic sources.
The board also met on May 15 to review the Economic Capital Framework (ECF), a crucial factor in determining the surplus or the dividend.
"We estimate an RBI dividend of Rs 2.6 lakh to Rs 3 lakh crore, depending on the level of provisioning," said Gaura Sen Gupta, chief economist at IDFC First Bank, according to a report by ET.
"The markets have largely factored in a dividend of approximately Rs 2.5 lakh crore. Any upside on the number would have an impact on bond yields," said Alok Singh, group treasury head at CSB Bank.
Contingency provisions are anticipated to be on par with or higher than last year. According to IDFC First Bank, provisions amounted to Rs 42,800 crore previously and are expected to range between Rs 40,000 - Rs 80,000 crore this year.
The relevant committee had recommended risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5-5.5% of the RBI's balance sheet.
The size of the CRB is closely linked to the pace of economic growth, as it is determined by the board based on the economy’s performance during the period.
Additionally, the final payout amount also depends on the central bank’s earnings from various domestic sources.
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