Last week the Reserve Bank of India (RBI) had to pay the government its lowest dividend in 10 years. The reason becomes clear in the central bank’s annual report released on 27 May 2022.

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While RBI’s income rose 20.1 per cent in Financial Year 2022, expenditure shot up more than 280 per cent, as Rs 1.15 trillion was set aside as provisions and transferred to the contingency fund. As per a report, the amount is decided nearly six times from 2021. Total expenditure rose to Rs 1.29 trillion in FY22, up from the previous year’s Rs 34,147 crore.

Also, the central bank had to pay banks a higher amount of interest on excess funds they kept with it through the reverse repo window.