Mumbai: The Reserve Bank of India's ( RBI) central board of directors is likely to meet on May 23 for an annual review of the central bank's balance sheet and transfer of FY25 surplus funds to the government. The payout could be as high as Rs 3 lakh crore, exceeding last year's dividend by nearly 50%.
"We estimate an RBI dividend of Rs 2.6 lakh to Rs 3 lakh crore, depending on the level of provisioning," said Gaura Sen Gupta, chief economist at IDFC First Bank.
The RBI board also met on May 15 to review the Economic Capital Framework (ECF). A crucial factor in determining the surplus or the dividend is the ECF, adopted by the RBI in 2019.
The relevant committee had recommended risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5-5.5% of the RBI's balance sheet. Besides, the payout also depends on the income the central bank earns from various domestic sources.
The board decides on the level of CRB that the central bank maintains based on how the economy is expected to perform during the period under review and is directly linked to the growth of the economy during a year.
"The markets have largely factored in a dividend of approximately Rs 2.5 lakh crore. Any upside on the number would have an impact on bond yields," said Alok Singh, group treasury head, CSB Bank.
Contingency provisions are expected to be similar to last year, or higher. Provisions stood at Rs 42,800 crore and is expected to be between Rs 40,000 crore and Rs 80,000 crore, according to IDFC First Bank.
"We estimate an RBI dividend of Rs 2.6 lakh to Rs 3 lakh crore, depending on the level of provisioning," said Gaura Sen Gupta, chief economist at IDFC First Bank.
The RBI board also met on May 15 to review the Economic Capital Framework (ECF). A crucial factor in determining the surplus or the dividend is the ECF, adopted by the RBI in 2019.
The relevant committee had recommended risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5-5.5% of the RBI's balance sheet. Besides, the payout also depends on the income the central bank earns from various domestic sources.
The board decides on the level of CRB that the central bank maintains based on how the economy is expected to perform during the period under review and is directly linked to the growth of the economy during a year.
"The markets have largely factored in a dividend of approximately Rs 2.5 lakh crore. Any upside on the number would have an impact on bond yields," said Alok Singh, group treasury head, CSB Bank.
Contingency provisions are expected to be similar to last year, or higher. Provisions stood at Rs 42,800 crore and is expected to be between Rs 40,000 crore and Rs 80,000 crore, according to IDFC First Bank.
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