The RBI’s economic capital framework determines how much of its earnings can be transferred to the government as dividends after building reserves. With recent revisions to the framework, the allocation mechanics may change—potentially increasing or reshaping the dividend outcome. ET breaks down what economic capital is, why it matters for public finances, and what the updated rules could mean going forward.
Foreign portfolio investors bought fewer Indian securities in FY26, with outflows increasing as tensions in West Asia escalated. Economists expect muted flows in FY27, citing the ongoing Gulf conflict, a weaker rupee, and worries about government finances. A major catalyst such as bond index inclusion may be needed to restart stronger inflows.
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