RBI Likely to Transfer Dividend Of Rs 1-lakh-Crore To Centre: Report

In a notable fiscal development last week, the RBI announced a major reduction in the government's borrowing through treasury bills, cutting the amount by Rs 60,000 crore

The Reserve Bank of India (RBI) is preparing to transfer a significantly larger dividend to the government, potentially amounting to around Rs 1 lakh crore, according to a report by The Economic Times (ET). This move is expected to provide a considerable boost to the Centre's financial resources.

In a notable fiscal development last week, the RBI announced a major reduction in the government's borrowing through treasury bills, cutting the amount by Rs 60,000 crore. This decision will decrease the funds the Centre would have otherwise raised through these short-term instruments.

Additionally, the RBI has taken steps to support the success of an upcoming operation in which the government plans to prematurely repay Rs 60,000 crore of its previous borrowings. Both measures are designed to make use of government funds that are currently dormant due to spending constraints linked to the election period.

These actions suggest that the Centre's financial position could see significant improvement in the near future. The RBI, acting as the government's debt manager, is expected to announce the transfer of its surplus funds to the government later in May, further enhancing the Centre's fiscal stability.