(MENAFN- Live Mint) "New Delhi: The dividend that the Reserve Bank of India (RBI) transfers to the Central government
in FY25 will likely be in the same range or slightly more than in the last fiscal (FY24), two people aware of the matter said.
Meanwhile, the dividend that the Centre will receive from public sector bank
s (PSBs) during FY2025 will likely be higher than what it received in FY24 as profits reported by state-owned bank
s were higher in FY24, as compared to the previous year, the people mentioned above said.
PSBs in profitProfits of state-owned bank
s crossed ₹98,000 crore in the first
three-quarters
of FY2024 and
are likely
to exceed ₹1.3 trillion by FY24-end read | Why small public sector bank
s are on the divestment radar\"The Centre expects dividend income from the RBI during FY25 to remain consistent, at the same level or slightly more as compared to the last year,\" the first person mentioned above said, requesting anonymity.\"The dividend from PSBs are expected to be over ₹15,000 crore during FY25,\" the person added dividend from the RBI is usually released to the Centre in May.
During FY24, the government
had pegged a 17% higher dividend at ₹48,000 crore from the RBI, public sector bank
s and financial institutions surpassedHowever,
this target was surpassed
with the transfer of ₹87,416 crore as surplus to the Central government
for FY2023 by the RBI, which was paid in May 2023 and accounted for in FY2024 by the government
read |
Public sector bank
s cannot issue look out circular to defaulters, says Bombay HCThe dividend payout from public sector bank
s for FY24 has been around
₹15,000 crore vote on the account budget presented in February states that the government
expects ₹1.02 trillion in dividends from the RBI and state-owned bank
s in FY2025 but doesn't give a breakup, the actual dividend from the RBI and state-owned bank
s
could
exceed the budgeted targets during FY25 and help the Centre stick to its fiscal deficit glide path and bring down the fiscal deficit to 5.1% in FY25 or even better it, said the second person mentioned above provisions\"There is a likelihood that the dividend income will be higher than the provisions made in the vote on account budget, similar to last year when the actual dividend proceeds exceeded the budgeted target,\" the person added read | Profit of Indian public sector bank
s surged by 40% in first nine months of FY24; check top performing lendersSpokespersons of the finance ministry and the RBI didn't respond to emailed queries.\"RBI dividends are understood to be followed basis recommendations of a previous committee report which principally follows a provisioning method for certain risk contingencies beyond which the surplus income is distributed as
dividend. As we are aware,
over
the last couple of
years,
RBI's
income has seen a rise on account of its interest income from holding securities (both foreign and domestic) and on loans provided to commercial bank
s funding the Indian economy expansion and growth appetite,\" said Anish Mashruwala, Partner, JSA Advocates and Solicitors.\"In
fact
due to the recent strengthening of the
USD,
the forex sales by the RBI have dipped significantly as compared to the previous year and this has dented the potential income on this front. However given the current
geo-political
realities, I am very bullish on India's continued upward trajectory and though the upcoming election results will certainly have an impact on the pace of this trajectory, my view is that RBI's dividend payout for FY25 will continue to remain strong and with higher foreign capital inflows into India, should be higher,\" Mashruwala added.
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