In a key financial decision, the Reserve Bank of India (RBI) has announced a surplus transfer of ₹2.68 lakh crore (₹2.69 trillion) to the Central Government for the financial year 2024-25. The decision was taken during the 616th meeting of the Central Board of Directors held on May 23, 2025, under the chairmanship of RBI Governor Sanjay Malhotra.
This marks one of the largest ever transfers made by the central bank, a move that could significantly bolster the government’s fiscal resources in the current financial year.
Revised Economic Capital Framework (ECF) and CRB
The surplus calculation was made in accordance with the newly revised Economic Capital Framework (ECF) approved on May 15, 2025. Under the revised ECF, the Contingency Risk Buffer (CRB) — a key risk provisioning measure — has been raised to 7.50% of the RBI’s balance sheet, up from 6.5% in FY24 and 6% in FY23. The permissible CRB range is now defined as 5.0% ± 1.5%.
During the COVID-19 pandemic and the years following, the CRB was maintained at a conservative 5.50% to support economic stability. The latest revision comes in light of improved macroeconomic conditions and a stronger balance sheet position.
Policy Implication
According to the RBI’s revised ECF, no further surplus transfers will be made until the minimum required level of realised equity is achieved. This policy ensures that the RBI retains adequate buffers for monetary and financial stability risks.
This significant surplus transfer, coupled with the increase in CRB, indicates a balancing act between supporting government finances and maintaining monetary stability amid evolving economic dynamics.