Modi government may get a $1.5 billion dividend boost from RBI

The Modi government expects to get $1.5 billion as interim dividend from the Reserve Bank of India this month, people with knowledge of the matter said.

The amount has been calculated for the six month through December 31, the people said asking not to be identified as the information is private. RBI's financial year runs from July to June.

The Reserve Bank had earlier declined requests from the government for an additional payment after the dividend payout dropped to a five year low. Prime Minister Narendra Modi’s administration is seeking additional funds following a plan to boost spending and shore up support ahead of 2019 federal elections widened the government’s fiscal deficit goal.


Finance minister spokesman DS Malik was not immediately available for a comment while RBI spokesman Jose Kattoor did not reply to an email seeking comment.

Under the RBI Act, 1934, the central bank is required to pay the government its surplus after making provisions for bad and doubtful debts, depreciation in assets, contribution to staff and superannuation fund and for all matters for which provisions are to be made by or under the Act or that are usually provided by bankers.

With inputs from ET Online