RBI Announces 2.11 lakh Crore dividend for the Central Government for FY24

The Reserve Bank of India has announced a record breaking 2.11 lakh Crore rupee dividend for the year 2023-2024 that it will pay out to the Government of India.

RBI dividends are usually paid from a 'surplus pool' that collects during previous fiscal periods since RBI FIscal year is from July - June, and contributes towards government expenditure thereby reducing the need to borrow from public. 

Unlike the banks it regulates, which are for-profit organisations, the RBI’s accounts reflect its functions as the monetary authority, fund manager of foreign exchange reserves, and the currency issuer.

The RBI thus earns from deploying the foreign exchange reserves in securities of major countries, particularly the US. It also parks reserves in deposits with other central banks and commercial banks, predominantly in the US and Europe. 

The other major source of income for the central banks is holding and transacting securities issued by the government for domestic monetary operations. It earns coupon payments and also makes capital gains or losses from trading in those securities as part of its monetary policy objectives.  

This years figure is a whole 141% more than the last years ~87,500 Crore rupee dividend payment.