RBI is going to create history, will give the biggest dividend of 2.69 lakh crores to Modi government:

News Topical, Digital Desk : The Reserve Bank of India (RBI) has announced a dividend of Rs 2.69 lakh crore to the government for the financial year 2024-25. This is the largest surplus transfer the government has ever received in any year. Earlier, RBI had transferred Rs 2.1 lakh crore to the government in 2023-24 and Rs 87,420 crore in 2022-23.

Why did the government get so much money?

RBI has earned a good amount from foreign currency assets this time. Apart from this, the bank has also made huge profits from VRR (Variable Rate Reverse Repo) operations and foreign exchange sales. Not only this, the fluctuations in interest rates in the last financial year also increased the income of the Reserve Bank.

What is the benefit to the government?

The government had set a target of raising 2.56 lakh crores from RBI, public sector banks and other financial institutions this year. But getting 2.69 lakh crores from RBI alone is like a bonus for the government. Experts believe that this can help the government with an additional 50,000 to 60,000 crores. However, this will not bring a big change in the fiscal deficit. It is estimated that the deficit may come down slightly from 4.4 percent to 4.3 percent.

What is CRB and why was it increased?

To keep the balance sheet of RBI safe, a Contingent Risk Buffer (CRB) is created. Consider it a kind of 'safety shield' which helps in dealing with any economic crisis. Earlier it was at 6.5 percent, but now it has been increased to 7.5 percent. That is, RBI has kept more capital safe to strengthen its balance sheet further. This step has been taken keeping in mind the possible risks of the future.

What will happen next?

If RBI has more than 7.5 per cent equity, the excess money can be transferred to the government. But if it is below the prescribed limit, the government will not get any dividend until it regains the minimum capital level.