Sun May 25 00:00:00 UTC 2025: Here’s a news article summarizing the provided text:

**RBI Delivers Record Surplus Transfer to Government Amid Past Tensions**

**Mumbai, May 25, 2025** – The Reserve Bank of India (RBI) has announced a record surplus transfer of ₹2.69 lakh crore to the Central government for the fiscal year 2024-25. This figure surpasses the government’s budgeted expectation of ₹2.56 lakh crore and marks a 27% increase from the previous year’s then-record transfer.

The transfer, decided upon by the RBI’s Central Board on May 23, 2025, stems from higher foreign exchange sales, increased earnings on foreign exchange assets, and gains from liquidity management. The RBI generates revenue through seigniorage (the difference between the face value and production cost of currency), interest on loans to government and banks, and returns on investments in foreign bonds.

The size of the surplus transfer has been a contentious issue in the past, particularly regarding the amount the RBI should hold in its Contingent Risk Buffer (CRB), a safety net against financial instability. A 2018 committee led by Bimal Jalan recommended a CRB range of 5.5-6.5% of the RBI’s balance sheet. The RBI maintained this range through the COVID-19 pandemic and increased it to the maximum of 6.5% in 2023-24. The central board recently reviewed the Economic Capital Framework (ECF) as recommended every five years by the Jalan Committee and has widened the CRB range to 4.5-7.5% from 2024-25 onwards, deciding to keep it at the upper limit of 7.5%.

Past disagreements between the RBI and the government over surplus transfers, detailed by figures like former Deputy Governor Viral Acharya and Finance Secretary Subhash Chandra Garg, led to public resignations. The Jalan committee’s recommendations initially eased tensions. While this year’s increased transfer is welcomed by the government, economists caution that high foreign exchange sales driving the profits may not be sustainable. However, the RBI’s newly broadened CRB range provides some flexibility for future transfers.

**This is the rewriten version as a news article:**

**Record RBI Surplus Boosts Government Coffers, Echoes Past Conflicts**

**MUMBAI – May 25, 2025** – The Reserve Bank of India (RBI) has delivered a massive ₹2.69 lakh crore surplus to the Central government, setting a new record and exceeding even the government’s own projections. The windfall, announced on Friday, is a welcome boost for the national treasury, but also a reminder of past clashes over the RBI’s financial autonomy.

The transfer, a staggering 27% increase over last year’s surplus, is fueled by higher foreign exchange sales and strong performance of the RBI’s foreign asset portfolio. Unlike a commercial dividend, the surplus represents the RBI’s profits after covering operational costs and setting aside funds for contingencies, including a risk buffer against financial instability.

The size of that buffer has been a key point of contention in recent years. In 2018, tensions between the RBI and the government erupted over demands for larger surplus transfers. Then-Deputy Governor Viral Acharya issued a stark warning about governments undermining the central bank’s independence, and explosive allegations later surfaced about Prime Minister Modi’s impatience with the RBI’s reserves. These disagreements ultimately led to the resignations of senior RBI officials.

A committee led by former RBI governor Bimal Jalan introduced a framework to determine the appropriate level of the Contingent Risk Buffer (CRB), aiming to balance financial prudence with the government’s need for funds. Recently the CRB range was widened to 4.5-7.5% to allow for the needed provisions.

While this year’s record transfer is undoubtedly a positive development for the government’s finances, economists caution that the specific factors driving the profit surge may not be repeatable. However, the RBI now has the flexibility to adjust its risk buffer in the future, which could influence future surplus distributions. The relationship between the central bank and the government remains a delicate balancing act.

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