Sale of dollars during the September 2024–January 2025 period and earnings from overseas investment could help the Reserve Bank of India (RBI) declare a surplus to the government for FY25, which either matches the bumper ₹2,10,874 crore it declared in FY24 or goes even higher, say experts.

The RBI sold dollars during the aforementioned period to reduce volatility in the rupee. The central bank reportedly sold about $80 billion from its kitty, resulting in gains for the central bank, experts opined.

Moreover, RBI’s investment in overseas securities has likely fetched higher returns due to rate cuts by the central banks of advanced economies. When rate cuts take effect, yields on government securities soften, and their prices rise. Bond yields and prices are inversely correlated and move in opposite directions.

As per the Union Budget for FY26, “dividend/surplus of Reserve Bank of India, nationalised banks, and financial institutions” for FY25 is now pegged at ₹2,34,284.60 crore (revised estimate), compared to ₹2,32,874 crore (budget estimate). For FY26, the Government expects ₹2.56 lakh crore under this head.

Referring to the aforementioned numbers and the fact that progress on the disinvestment of public sector undertakings has been tepid in FY25 so far (₹3,388 crore from the offer for sale of the General Insurance Corporation of India and ₹815 crore remittance from SUUTI), it is more likely than not that the RBI’s surplus to the government will exceed expectations.

In its latest annual report, RBI noted that its ‘Other Liabilities’ increased by 92.57 per cent from ₹1,35,282.86 crore as on March 31, 2023 to ₹2,60,520.73 crore as on March 31, 2024, primarily due to the increase in surplus payable to the Central government.

Surplus given by the RBI to the government rose from ₹57,127.53 crore in FY20 to ₹99,122 crore in FY21. It declined to ₹30,307.45 crore in FY22, but rose to ₹87,416.22 crore in FY23.

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