Government targets Rs 3.16 lakh through dividend from RBI, banks: hikes target for FY26

Mumbai: The Centre is budgeting a record Rs 3.16 lakh crore in dividend receipts from the Reserve Bank of India and public sector banks (PSBs) in 2026-27, providing a significant non-tax revenue cushion helping to keep the fiscal deficit under check.

For the current year, the government has sharply raised its dividend estimate to Rs 3.04 lakh crore, up by Rs 44,590 crore from the Budget estimate of Rs 2.56 lakh crore. Officials attributed the upward revision largely to higher surplus transfers from the RBI and improved profitability at state-owned banks.




The RBI’s contribution has been bolstered by its active intervention in the foreign exchange market. Data show the central bank sold about $43.2 billion in the spot and non-deliverable forward markets up to late January 2026 to manage volatility in the rupee amid foreign portfolio outflows and external pressures. These dollar sales, undertaken at higher exchange rates than the RBI’s historical acquisition costs, are estimated to have generated substantial trading gains, supporting a larger surplus available for transfer to the government.

Public sector banks have also strengthened dividend flows. In 2024-25, PSBs declared total dividends of Rs 34,995 crore, up nearly 26% from the previous year, supported by a sharp rise in aggregate net profits. Given the government’s majority ownership in most PSBs, its share of these payouts rose accordingly. Among the largest contributors was State Bank of India, alongside other large lenders.

The higher dividend haul is expected to help the Centre adhere to its fiscal consolidation path without relying on aggressive stake sales in state-owned firms. However, analysts said the sustainability of such receipts will depend on global market conditions, the RBI’s future intervention needs and the ability of PSBs to maintain earnings momentum.