The Reserve Bank of India, after its central board meeting on Monday, has announced to transfer an interim dividend of Rs 28,000 crore to the Government of India. The dividend payout is likely to benefit the government to meet its revised fiscal deficit target of 3.4 per cent of GDP for 2018-19.
RBI in a press release said that the decision for the dividend payout was taken based on a limited audit review and after applying the extant economic capital framework. According to RBI, it is the second consecutive year where the central bank has transferred an interim dividend.
The Reserve Bank of India, in FY 2017-18, had transferred a total of Rs 50,000 crores to the government. Out of the sum transferred, Rs 10,000 crores had been transferred in the form of an interim dividend. RBI, whose financial year runs from July to June, typically transfers the surplus that it earns in the form of a dividend in July or August every year.
The Reserve bank, which generates a surplus from its operations in the money markets, debt issuances and liquidity operations, transfers the surplus generated to the government after funds are first allocated to its contingency reserve or the asset development fund.
According to the revised estimates for FY19, the government has accounted for Rs 74,140 crore in dividends from banks, financial institutions and RBI, which stands higher than the budget estimate of Rs 54,817 crore. The RBI had previously transferred Rs 40,000 crore annual dividend in August.