Reserve Bank of India (RBI) has transferred a higher-than-expected surplus of nearly Rs 1 lakh crore to the central government for the nine months of this financial year. This is a big boost for the government's finances which are stretched due to the pandemic.

The surplus transferred this year is the highest since 2019 when the new economic capital framework was introduced. This framework required the central bank to maintain a contingency buffer of 5.5 percent to 6.5 percent of its balance sheet.

Also Read: RBI Board approves transfer of Rs 99,122 cr as surplus to government

So far, RBI has chosen to maintain the risk buffer at the lower end of 5.5 percent. CNBC-TV18's Executive Editor Latha Venkatesh decodes the implications of the transfer on government's fiscal math.

To know more, watch the video.

(Edited by : Jerome Anthony)