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Transfer of Surplus by the RBI to the Government

The surplus payable by the Reserve Bank of India (RBI) to the Central Government for the financial year 2025-26 amounted to ₹2,86,588.46 crore. 

Why does the RBI transfer the surplus amount to the Central Government?

As per section 47 of the RBI Act, 1934, after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and other provisions, the balance of the profits of the RBI is required to be paid to the Central Government.

Also, the Central Government holds 100% of the share capital of the RBI.

How much risk provision is required to be maintained by the RBI?

The RBI developed the Economic Capital Framework (ECF) during 2014-15 and 2015-16 for determining the appropriate level of risk provisions to be made under the provisions of section 47 of the RBI Act, 1934. 

In November 2018, the RBI, in consultation with the Government, constituted an Expert Committee to review the ECF of the RBI (Chairman: Dr. Bimal Jalan, former Governor). The Committee recommended –

  • To maintain a Contingent Risk Buffer (CRB) within a range of 5.5% to 6.5% (to be decided by the Central Board) of the RBI’s balance sheet, comprising 4.5% to 5.5% for monetary and financial stability risks and 1% for credit and operational risks. 
  • To review the framework every 5 years. 

In line with the Committee’s recommendation, a comprehensive internal review of the ECF was undertaken in May 2025 and the following revisions were made –

  • The range for buffers for monetary and financial stability risks was widened to 5% ± 1.5% of balance sheet size (vis-à-vis the previous range of 4.5% to 5.5%).
  • Consequently, the CRB is required to be maintained in the range of 6% ± 1.5% of balance sheet size (as against the previous range of 5.5% to 6.5%).

How is the surplus to be transferred to the Central Government computed?

The Central Board of the RBI approves the CRB to be maintained for the financial year as a percentage (within the range of 4.5% to 7.5%) of the balance sheet size. The following are the components of realised equity under ECF –

  • Capital (section 4 of the RBI Act, 1934) – remains constant at ₹5 crore
  • Reserve Fund (section 46 of the RBI Act, 1934) – remains constant at ₹6500 crore
  • Risk provisions –
    • Contingency Fund (CF) – Debit balances, if any, in the following revaluation accounts on the balance sheet date are charged to (deducted from) the CF and the same is reversed (added back) on the first working day of the following accounting year –
      • Currency and Gold Revaluation Account (CGRA)
      • Investment Revaluation Account – Foreign Securities (IRA-FS)
      • Investment Revaluation Account – Rupee Securities (IRA-RS)
      • Foreign Exchange Forward Contracts Valuation Account (FCVA)
    • Asset Development Fund (ADF)

Further, a contribution of ₹1 crore each is made to the following statutory funds –

  • Contribution to National Industrial Credit (Long Term Operations) Fund (section 46C of the RBI Act, 1934)
  • Contribution to National Housing Credit (Long Term Operations) Fund (section 46D of the RBI Act, 1934)
  • Transferable to NABARD (section 46A of the RBI Act, 1934) – 
    • National Rural Credit (Long Term Operations) Fund 
    • National Rural Credit (Stabilisation) Fund

After adjusting the expenditure including provision for CF and contribution to the statutory funds, the surplus for the year (if any) is transferred to the Central Government.

How much surplus was transferred by the RBI to the Central Government for the financial year ended March 31, 2026?

The Central Board approved maintaining the CRB at 6.5% of the size of the balance sheet of the RBI for the year 2025-26. 

Particulars (as on March 31, 2026)

 

 Amount (₹ crore)
CF (previous year’s closing balance)

 

 5,42,426.96
Amounts charged to CF in previous year on account of debit balances in the following accounts reversed (added back)

 

 
IRA-FS (b) (+) 81,366.87
Amounts charged to (deducted from) CF on account of debit balances in the following accounts

 

 
IRA-FS (c) (-) 90,833.06
IRA-RS (d) (-)

30,603.99
FCVA (e) (-) 43,403.23
Balance in CF prior to transfer of provisions for the year

 

 4,58,953.55

The total assets (the balance sheet size) of the RBI as on March 31, 2026 were ₹91,97,121.08 crore. Accordingly, a provision of ₹1,09,379.64 crore was made and transferred to CF during the year.

Particulars (as on March 31, 2026)

 

 Amount (₹ crore)
CRB to be maintained at 6.5% of the size of the balance sheet

 

 5,97,812.87
Capital (remains constant) (-) 5
Reserve Fund (remains constant) (-) 6500
ADF (unchanged) (-) 22,974.68
Balance in CF prior to transfer of provisions for the year (a) (-) 4,58,953.55
Amount required to be transferred to the CF (b)

 

 1,09,379.64
CF (current year’s closing balance) (a+b)

 

 5,68,333.19

After adjusting the expenditure including provision for CF and contribution of ₹4 crore to four statutory funds, the surplus payable to the Central Government for the year 2025-26 amounted to ₹2,86,588.46 crore.

Particulars (as on March 31, 2026)

 

 Amount (₹ crore)
Total income

 

 4,27,684.15
Total expenditure (-) 31,712.05
Provision transferred to CF (-) 1,09,379.64
Contribution to

 

 
National Industrial Credit (Long Term Operations) Fund (-) 1
National Housing Credit (Long Term Operations) Fund (-) 1
Transferable to NABARD

 

 
National Rural Credit (Long Term Operations) Fund (-) 1
National Rural Credit (Stabilisation) Fund (-) 1
Surplus payable to the Central Government

 

 2,86,588.46

Is the RBI required to pay tax on the surplus?

As per section 48 of the RBI Act, 1934, the RBI is not liable to pay income tax or super tax on any of its income, profits or gains.

What other changes were made in the financial statements of the RBI based on the recommendations of the Bimal Jalan Committee?

The following changes were made from the year 2020-21 –

  • The accounting year of the RBI was changed from ‘July - June’ to ‘April - March’. The year 2020-21 being the year of transition, was of 9 months only (July 2020 - March 2021).
  • The risk provisions (CF and ADF) and the balances in the revaluation accounts which formed part of the balance sheet head ‘Other Liabilities and Provisions’ were shown as distinct balance sheet heads.
  • The nomenclature of the balance sheet head - ‘Other Liabilities and Provisions’ was changed to ‘Other Liabilities’.
  • Unit of presentation of the financial statements was changed from ‘Rupees billion’ to ‘Rupees crore’.
  • The nomenclature of ‘Gold coin and Bullion’ forming part of Assets of Banking Department (BD) and ‘Gold Coin and Bullion (as backing for Note issue)’ forming part of Assets of Issue Department (ID) was changed to ‘Gold - BD’ and ‘Gold - ID’, respectively.


References

Reserve Bank of India. (2019, August 29). 'RBI Annual Report 2018-19 - XI. Governance, Human Resources and Organisational Management'. Retrieved from https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1266

Reserve Bank of India. (2021, May 27). 'RBI Annual Report 2020-21 - XII. The Reserve Bank’s Accounts for 2020-21'. Retrieved from https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1325

Reserve Bank of India. (2022, August 29). 'The Reserve Bank of India Act, 1934'. Retrieved from https://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Act

Reserve Bank of India. (2025, May 29). 'RBI Annual Report 2024-25 - XI. Governance, Human Resources and Organisational Management'. Retrieved from https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1441

Reserve Bank of India. (2026, May 29). 'RBI Annual Report 2025-26 - XII. The Reserve Bank’s Accounts for 2025-26'. Retrieved from https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1472


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