RBI surplus transfer to govt down 69% at Rs 30,307 cr for FY22

The quantum of transfer is lower than the ₹74,000 crore budgeted by the government for the current fiscal.

The transfer amount was finalised at the central bank board meeting, which approved the annual report for last fiscal, RBI said in a release.

Economists said the fall in the transferable surplus is because of the increased interest the RBI had to pay to banks which parked their surplus liquidity in the reverse repo window.

“In FY22 due to heavy investment of RBI in reverse repo auctions, which at an average of ₹6 to 7 lakh crore a day at an average cost of even 3.5% would mean a cost of ₹21,000-24,500 crore. This would have accrued to the government as surplus would have been higher,” Madan Sabnavis, chief economist at

, said in a note. The shortfall from the government’s budgeted estimates will have to be made up from dividends from public sector institutions, Sabnavis said.

“For the year, the government is targeting ₹74,000 crore approx as dividend/surplus from RBI, PSBs (public sector banks) and other public financial institutions. This will mean that a large part of the profit of PSBs and PIs (public institutions) will have to be transferred to make good this number or else there will be a slippage,” Sabnavis said.

The board also decided to keep the contingency risk buffer at 5.50% at the lower end of the range, according to RBI’s economic capital framework (ECF). The buffer is carved out of the surplus funds with RBI at the end of the fiscal and is a specific provision meant for meeting unexpected and unforeseen contingencies, including depreciation in the value of securities, risks arising out of monetary/exchange rate policy operations, systemic risks and any risk arising on account of the special responsibilities enjoined upon the Reserve Bank.

Details of RBI’s account will be available when the central bank releases its annual report in next few days. The RBI board also reviewed the current economic situation, global and domestic challenges and the impact of recent geopolitical developments.

Besides Governor Shkatikanta Das, all four deputy governors – Mahesh Kumar Jain, Michael Debabrata Patra, M Rajeshwar Rao and T Rabi Sankar – also attended the meeting. Other directors of the central board, Satish K Marathe, S Gurumurthy, Revathy Iyer and Sachin Chaturvedi along with economic affairs secretary Ajay Seth, financial services secretary Sanjay Malhotra also attended the meeting.