India central bank dividend to government seen at around 2.6 tln rupees to 3 tln rupees, IDFC FIRST Bank says

IDFC First Bank

07/05/2025 05:10

Reserve Bank of India's dividend to government for FY25 seen at 2.6 trillion rupees to 3 trillion rupees, says IDFC FIRST Bank

Government's estimate for dividend from RBI and state-owned companies was 2.6 trillion rupees, budget document shows

Earnings on foreign exchange transactions, RBI's FX interventions to support higher dividend, bank says

Pegs RBI's gross dollar sales at $371.6 billion in FY25 (until Feb) versus $153 billion in FY24

Revenues from FX transactions to be "substantial" as cost of dollar purchase is lower than spot rate, bank says

IDFC FIRST Bank expects RBI's balance sheet growth to be at least in line with nominal GDP growth of 10.5%

Interest income from foreign securities likely to be slightly lower in FY25, it says

Adds provisioning expected to be at similar levels or higher than that of FY24 due to volatile global conditions

Higher dividend creates fiscal space of 0.1% to 0.2% of GDP, IDFC FIRST Bank says

Impact on system liquidity will be felt from June onwards, once government expenditure picks up, it adds

(Reporting by Siddhi Nayak)

((siddhi.nayak@tr.com))