The Reserve Bank of India (RBI) on Friday said its board has approved a dividend payment of Rs 30,307 crore to the government for the fiscal ended March 2022.
The board approved the transfer of Rs 30,307 crore as surplus to the central government for the accounting year 2021-22 while deciding to maintain the Contingency Risk Buffer at 5.50 percent, RBI said in a statement.
The decision on the dividend payment was made in the 596th meeting of the Central Board of Directors of RBI, headed by Governor Shaktikanta Das, held on Friday.
Last year in May, RBI declared a dividend of Rs 99,122 crore for nine months (July 2020 to March 2021). The dividend was paid for that period as RBI aligned its financial year with the government's financial year.
Earlier, RBI used to follow the July-June period earlier as against the government's April-March financial year.
During its meeting, the board reviewed the current economic situation, global and domestic challenges, and the impact of recent geopolitical developments.
The board also discussed the working of RBI during the year April 2021 – March 2022 and approved the annual report and accounts for the accounting year 2021-22, the statement said.
Madan Sabnavis, Chief Economist, Bank of Baroda said: The RBI Board has approved transfer of Rs 30,307 crore to the government. Last year it was Rs 99126 crore. Two issues come up:
1. In FY22, due to heavy investment of RBI in reverse repo auctions which at an average of Rs 6-7 lakh crore a day at an average cost of even 3.5 percent would mean a cost of Rs 21,000-24,500 cr. This would have accrued to the government as surplus would have been higher.
2. For the year, the government is targeting Rs 74,000 cr approximately as dividend/surplus from RBI, PSBs and other public FIs. This will mean that a large part of profit of PSBs and PIs will have to be transferred to make good this number or else there will be a slippage.