Fitch: Record RBI dividend unsustainable

New Delhi: Fitch Ratings on Monday said the record-high dividend transfer by the RBI to the government is equivalent to 0.6 per cent of GDP, and such high level of dividends as a percentage of GDP is unlikely to be maintained.

The board of India’s central bank last week decided to transfer a record Rs2.1 lakh crore dividend to the government out of the profits earned in fiscal 2023-24. This is more than double of Rs1.02 lakh crore that was budgeted by the government.

Fitch said an important driver of higher RBI profits appears to be higher interest revenue on foreign assets, though the central bank has not yet provided a detailed breakdown.