The Reserve Bank of India (RBI) has declared a record dividend of ₹2.11 lakh crore to the Government of India for the financial year 2023-24. This decision was made during the 608th meeting of the Central Board of Directors of RBI, which took place today in Mumbai. The meeting was chaired by Governor Shaktikanta Das.
This significant dividend comes as a result of the RBI’s financial performance over the past year. The decision to distribute such a large amount is seen as a boost for the government, providing additional funds that can be used for various public spending initiatives and economic programs.
In its press release, the RBI highlighted the importance of maintaining a Contingent Risk Buffer (CRB) to safeguard against future economic uncertainties. During the challenging years from 2018-19 to 2021-22, which were marked by the Covid-19 pandemic and difficult macroeconomic conditions, the CRB was kept at 5.50 percent of the RBI’s balance sheet to support economic stability and growth.
With the revival in economic activity during the financial year 2022-23, the RBI increased the CRB to 6.00 percent. Observing continued economic robustness and resilience, the Board decided to raise the CRB further to 6.50 percent for the financial year 2023-24.
The press release also mentioned that the Committee on Risk Provisioning had recommended keeping the CRB within a range of 5.5 to 6.5 percent of the RBI’s balance sheet. This recommendation was taken into account while deciding on the latest increase in the CRB.
