UPSC Prelims Practice Questions — RBI board approves transfer of ₹2,86,588 cr. surplus to govt.

Q1. In the context of the RBI's annual payment to the Central Government, the term 'surplus' dealt with under Section 47 of the Reserve Bank of India Act, 1934 refers to which one of the following?

  • A. The balance of profits remaining after provision for bad and doubtful debts, depreciation in assets, and contributions to staff and superannuation funds
  • B. The gross income earned by the RBI from its foreign exchange operations and holdings before any provisioning
  • C. The amount set aside each year as the Contingent Risk Buffer within the RBI's economic capital
  • D. The unrealised revaluation gains on the RBI's holdings of gold and foreign currency assets

Q2. With reference to the legal and institutional basis of the RBI's surplus transfer to the Central Government, consider the following statements: 1. Section 47 of the RBI Act, 1934 provides the statutory basis for paying the RBI's surplus to the Central Government. 2. The quantum of surplus actually transferred in a given year is shaped not by Section 47 alone but by the Economic Capital Framework, which fixes the risk buffer to be retained. 3. The surplus so transferred is classified in the Union Budget as tax revenue of the Centre. Which of the statements given above is/are correct?

  1. Section 47 of the RBI Act, 1934 provides the statutory basis for paying the RBI's surplus to the Central Government.
  2. The quantum of surplus actually transferred in a given year is shaped not by Section 47 alone but by the Economic Capital Framework, which fixes the risk buffer to be retained.
  3. The surplus so transferred is classified in the Union Budget as tax revenue of the Centre.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q3. With reference to the Contingent Risk Buffer (CRB) under the RBI's Economic Capital Framework, consider the following statements: 1. The Bimal Jalan Committee recommended maintaining the CRB within a range of 5.5%–6.5% of the RBI's balance sheet. 2. Following a 2025 review, the RBI widened the CRB band to 4.5%–7.5% of its balance sheet. 3. The Jalan Committee recommended that the Economic Capital Framework be reviewed every ten years. Which of the statements given above is/are correct?

  1. The Bimal Jalan Committee recommended maintaining the CRB within a range of 5.5%–6.5% of the RBI's balance sheet.
  2. Following a 2025 review, the RBI widened the CRB band to 4.5%–7.5% of its balance sheet.
  3. The Jalan Committee recommended that the Economic Capital Framework be reviewed every ten years.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. With reference to the RBI's Economic Capital Framework and the Bimal Jalan Committee, consider the following statements: 1. Realised equity comprises the RBI's capital, reserve fund and risk provisions. 2. Revaluation balances represent unrealised gains or losses arising from movements in exchange rate, gold price and interest rate. 3. The Contingent Risk Buffer is meant to cover monetary, financial-stability, credit and operational risks. 4. The Jalan Committee was a three-member panel constituted in 2018. Which of the statements given above is/are NOT correct?

  1. Realised equity comprises the RBI's capital, reserve fund and risk provisions.
  2. Revaluation balances represent unrealised gains or losses arising from movements in exchange rate, gold price and interest rate.
  3. The Contingent Risk Buffer is meant to cover monetary, financial-stability, credit and operational risks.
  4. The Jalan Committee was a three-member panel constituted in 2018.
  • A. 1 and 3 only
  • B. 2 only
  • C. 4 only
  • D. 3 and 4 only

Q5. With reference to the RBI's surplus transfer approved for the accounting year 2025-26, consider the following statements: 1. The surplus approved for transfer was ₹2,86,588.46 crore. 2. It was approved at the 623rd meeting of the RBI's Central Board. 3. The entire amount was moved into the Contingent Risk Buffer instead of being paid to the Central Government. 4. The transfer was approved during the tenure of Governor Sanjay Malhotra. Which of the statements given above is/are correct?

  1. The surplus approved for transfer was ₹2,86,588.46 crore.
  2. It was approved at the 623rd meeting of the RBI's Central Board.
  3. The entire amount was moved into the Contingent Risk Buffer instead of being paid to the Central Government.
  4. The transfer was approved during the tenure of Governor Sanjay Malhotra.
  • A. 1 and 4 only
  • B. 2 and 3 only
  • C. 1, 2 and 4 only
  • D. 1, 2, 3 and 4

Q6. The Contingent Risk Buffer (CRB), which the RBI maintained at 6.5% of its balance sheet while approving the 2025-26 surplus transfer, is best described as which one of the following?

  • A. A specific provision within the RBI's economic capital, set aside to cover monetary, financial-stability, credit and operational risks
  • B. The portion of the annual surplus that is paid over to the Central Government as dividend
  • C. The stock of foreign currency and gold assets held by the RBI as part of India's foreign exchange reserves
  • D. The minimum cash balance that scheduled banks must maintain with the RBI under the reserve ratio requirements

Q7. Consider the following pairs of accounting year and the RBI surplus transferred to the Central Government: 1. FY 2018-19 — ₹1,76,051 crore 2. FY 2023-24 — ₹2,10,873.99 crore 3. FY 2024-25 — about ₹2.69 lakh crore 4. FY 2025-26 — ₹1,76,051 crore Which of the pairs given above is/are NOT correctly matched?

  1. FY 2018-19 — ₹1,76,051 crore
  2. FY 2023-24 — ₹2,10,873.99 crore
  3. FY 2024-25 — about ₹2.69 lakh crore
  4. FY 2025-26 — ₹1,76,051 crore
  • A. 1 and 2 only
  • B. 3 only
  • C. 4 only
  • D. 2 and 4 only

Q8. The RBI's unusually large transfer of ₹1,76,051 crore for FY 2018-19 was composed of how many distinct components — namely a regular surplus and a one-time write-back of excess provisions identified following the Jalan Committee?

  • A. One
  • B. Two
  • C. Three
  • D. Four

Q9. With effect from which accounting year was the RBI's accounting year aligned with the Government of India's fiscal year of April–March?

  • A. 2018-19
  • B. 2019-20
  • C. 2020-21
  • D. 2021-22

Q10. During the RBI's transition to the April–March accounting cycle, its accounting year 2020-21 was constituted as which one of the following?

  • A. A nine-month period from July 2020 to March 2021
  • B. A full twelve-month period from April 2020 to March 2021
  • C. A fifteen-month period from July 2020 to September 2021
  • D. An eighteen-month period from July 2019 to December 2020

Q11. With reference to the composition of the RBI's Central Board under the Reserve Bank of India Act, 1934, consider the following statements: 1. The Central Board is headed by the Governor. 2. The Act provides for not more than four Deputy Governors. 3. Ten Directors are nominated to the Central Board by the Central Government. 4. Four Directors are elected to the Central Board by the shareholders of the RBI. Which of the statements given above is/are NOT correct?

  1. The Central Board is headed by the Governor.
  2. The Act provides for not more than four Deputy Governors.
  3. Ten Directors are nominated to the Central Board by the Central Government.
  4. Four Directors are elected to the Central Board by the shareholders of the RBI.
  • A. 1 and 2 only
  • B. 3 only
  • C. 4 only
  • D. 2 and 3 only

Q12. With reference to the fiscal implications of the RBI's 2025-26 surplus transfer, consider the following statements: 1. The RBI's surplus transfer is accounted for as non-tax revenue of the Central Government. 2. The actual RBI surplus of ₹2,86,588.46 crore for FY26 exceeded the Union Budget's dividend estimate of about ₹2.56 lakh crore from the RBI and public sector banks combined. 3. A higher-than-budgeted RBI dividend, other things being equal, widens the Centre's fiscal deficit for that year. Which of the statements given above is/are correct?

  1. The RBI's surplus transfer is accounted for as non-tax revenue of the Central Government.
  2. The actual RBI surplus of ₹2,86,588.46 crore for FY26 exceeded the Union Budget's dividend estimate of about ₹2.56 lakh crore from the RBI and public sector banks combined.
  3. A higher-than-budgeted RBI dividend, other things being equal, widens the Centre's fiscal deficit for that year.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3