The decision was taken when the Central Board of the RBI met on Friday under the chairmanship of Governor Shaktikanta Das through video conference.

The Board decided to maintain the Contingency Risk Buffer at 5.5%.

“The Board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and other measures taken by RBI to mitigate the economic impact of COVID-19 pandemic. The Board discussed the proposal of setting up an Innovation Hub. The Board discussed various areas of operations of the Bank during the last year and approved the Annual Report and accounts of the of the Reserve Bank for the year 2019-20. The Board also approved the transfer of ₹57,128 crore as surplus to the Central Government for the accounting year 2019-20, while deciding to maintain the Contingency Risk Buffer at 5.5%,” the central bank said in an official statement.

Deputy Governors B.P. Kanungo, Mahesh Kumar Jain and Michael Debabrata Patra and other Directors of the Central Board attended the meeting. Tarun Bajaj, Secretary, Department of Economic Affairs and Debasish Panda, Secretary, Department of Financial Services also attended the meeting.

Last year the RBI’s board approved a record payment of ₹1.76 trillion to the government, which included ₹1.23 trillion as dividend and ₹52,640 crore from its surplus capital.

“Revenue is falling well short of projections as India’s economy heads for its first full-year contraction in more than four decades. At the same time, the government is being forced to spend more to cushion the blow from the pandemic, straining the budget deficit. The government can help bridge the funding gap by drawing more cash out of the central bank, sell state assets and push up borrowing, which is already at a record high,” Bloomberg reported earlier on Friday.

The dividend from the central bank will come at a time when the central government’s finances are under severe strain. The government’s fiscal deficit as on June 30 touched 83.2% of the full year Budget target of ₹7.96 trillion rupees, primarily on account of a sharp fall in revenues due to the nationwide lockdown, imposed to curb the spread of Covid-19.