Mumbai, May 22 -- The Reserve Bank of India (RBI) will transfer a record Rs.2.87 trillion dividend to the Centre and boost its own contingency risk buffer by over Rs.1 trillion, balancing the need to support public finances and prepare for heightened global risks.

The RBI board on Friday approved the dividend, higher than last year's Rs.2.68 trillion, but slightly below expectations. The dividend hike is expected to provide a significant boost to the Centre's finances at a time of rising pressure from volatile crude oil prices, potential subsidy burdens and slowing economic growth.

However, economists remained divided on whether the transfer would be enough to prevent a widening fiscal deficit amid escalating geopolitical tensions linke...