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Revised Economic Capital Framework 2025
June 2 , 2025
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- RBI has taken a step to strengthen its financial resilience by revising its Economic Capital Framework (ECF) and risk provisioning norms.
- The revision follows a five-year of periodic review, as recommended by the Bimal Jalan Committee.
- The original ECF, adopted in August 2019, has been in operation for nearly five years.
- The ECF governs how much capital the RBI should maintain to cover its various risks and how much of its surplus income can be transferred to the Government of India.
- The new framework allows for a contingency risk buffer (CRB) range of 4.5-7.5 per cent, expansion from the previous 5.5-6.5 per cent range.
- From FY19 to FY22, the RBI maintained a CRB of 5.50 per cent.
- In FY23, it increased to 6 per cent, and further to 6.5 per cent in FY24.
- RBI’s central board approved a surplus transfer of approximately ₹2.69 trillion to the government for the fiscal year 2024-25.
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