Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

RBI Transfers Rs 10,000 Crore As Extra Dividend To Government

The Reserve Bank of India transferred additional Rs 10,000 crore as interim dividend to the government in financial year ended March 31, a senior government official told BloombergQuint.

It would come from the central bank’s surplus of financial year ending June 30, 2018, the official said requesting anonymity. The RBI follows July-June year, different from April to March followed by the government.

That additional payout will help the government manage its fiscal deficit as it has provisionally exceeded it for the 2017-18. And it comes after RBI’s dividend for 2016-17 fell by half over the previous year to Rs 30,659 crore after Prime Minister Narendra Modi withdrew old high-value currency, which led to printing of new notes.

After the Union Budget 2018-19 in February, Economic Affairs Secretary Subhash Chandra Garg had told BloombergQuint in an interview that the government had budgeted an extra dividend from the RBI in its revised estimates, over and above Rs 30,659 crore already transferred. Earlier in August, he had said the government was in discussion with the RBI to transfer more funds out of the surplus it generated in 2016-17, since it had budgeted a dividend transfer of Rs 58,000 crore.

Addition payout also comes after the RBI governor Urjit Patel, in the previous monetary policy in February, indicated that the central bank doesn’t intend to transfer any additional dividend to the government this financial year.

"We always share the dividend with the government and we have already done that for this year. That’s something that is done in a mechanical way and it will continue to do so going forward,” he had said. “Our fiscal year, as you know, is from July to June, so we are halfway through our current fiscal year.”