RBI to transfer Rs 87,416 cr surplus to govt for FY23, up from ₹30,307 cr a year earlier

Mumbai: The Reserve Bank of India nearly tripled its annual surplus transfer to the government, helping the state reap a windfall that will ease worries about any strain on its finances amid flailing asset sales.

It will transfer ₹87,416 crore as surplus for the fiscal year ended March, up from ₹30,307 crore a year earlier.

"The board approved the transfer of ₹87,416 crore as surplus to the central government for the accounting year 2022-23, while deciding to keep the contingency risk buffer at 6%," the RBI said.


The budget had estimated receipts worth ₹48,000 crore by way of total dividends from public sector banks and the RBI.

"This will come in very handy and ensure that the government manages its fiscal numbers with relative ease given that there are question marks on the divestment programme,'' said Madan Sabnavis, chief economist at Bank of Baroda.

The higher payout was enabled by increased earnings on sale of forex during the year.

Higher Interest Income
Better returns on forex investments in US treasuries (though the value of bonds would have fallen, which has to be charged to the contingency reserve), revaluation of forex assets and adjustments in reserves as per the Bimal Jalan committee recommendations also helped.

The average historical cost of dollar purchases is estimated at around Rs 63 a unit. But the market price at which RBI sold dollars averaged Rs 80 during the year. The RBI had earned Rs 68,990 crore in FY22 out of its foreign exchange transactions involving gross dollar purchases of $96 billion.

The central bank sold a gross $206 billion during the April-February period of FY23, up from $96 billion in the previous fiscal.

Lending to banks under various windows may have earned the RBI higher interest income as the benchmark repo rate against which it lends to banks had climbed 2.5 percentage points during the year.

The central bank's revised accounting framework stipulates that the accounting practice of forex operations be linked to historical costs against the earlier practice of week-to-week costs.