The Reserve Bank of India’s board on Wednesday approved a transfer of Rs 2.1 lakh crore as surplus to the Union government for the financial year 2023-’24.

Every year, the central bank pays a dividend to the government to help with the finances from its surplus or profit. This is the highest annual surplus, or dividend, transferred to the Centre by the central bank, Moneycontrol reported.

The central bank said that its board decided to increase the Contingent Risk Buffer to 6.5% of its balance sheet size for the financial year 2023-’24 because the “economy remains robust and resilient”. The buffer is a fund maintained by the Reserve Bank of India mainly for use in contingencies.

The surplus was calculated on the basis of the economic capital framework the central bank adopted in August 2019 as per the recommendations of the Bimal Jalan committee, the central bank said. The framework provides a methodology to determine the level of risk provisions to be made by the bank.

The committee, set up to review the existing framework at the time, had recommended that the risk provisioning under the Contingent Risk Buffer be maintained within a range of 6.5% to 5.5%.

From the financial year 2018-’19 to the financial year 2021-’22, the board had maintained the buffer at 5.5% of the bank’s balance sheet size to support growth and economic activities considering the macroeconomic situation at the time and later the Covid-19 pandemic, said the central bank.

With economic growth improving in the financial year 2022-’23, the buffer was increased to 6%.

The central bank had transferred Rs 87,416 crore to the Union government as divided in the financial year 2022-’23.