Reserve Bank of India's Financial Performance in FY25
The Reserve Bank of India (RBI) reported a substantial increase in its net income for the fiscal year 2025, attributed largely to higher global interest rates and gains from dollar sales, which helped stabilize the rupee.
Key Financial Outcomes
- RBI's net income increased by 27% to ₹2.69 lakh crore, up from ₹2.11 lakh crore the previous year.
- Earnings from foreign sources rose by 38%, reaching ₹2.58 lakh crore.
- The rate of earnings on foreign currency assets improved to 5.31% from 4.21% the previous year.
- The RBI paid a record dividend of ₹2.69 lakh crore to the government, providing fiscal space of 0.12% of GDP.
Contingency Risk Buffer and Economic Capital Framework
- The contingency risk buffer (CRB) increased to a maximum of 7.5% of the RBI’s balance sheet.
- The revised economic capital framework (ECF) allows a CRB of 4.5-7.5%.
- If provisioning had remained at 6.5%, the dividend could have been ₹3.5 lakh crore.
Investment and Income Growth
- Interest income from foreign securities increased by 48% to ₹97,007 crore.
- Income from foreign exchange transactions rose by 33% to ₹1.11 lakh crore.
Economic Outlook and Policy Directions
- Domestic economic activity is expected to strengthen, with headline inflation moving towards the target in 2025-26.
- Monetary policy aims for durable price stability to sustain high growth.
- Liquidity management operations will align with the monetary policy stance.
Expenditures and Asset Growth
- Total expenditure rose by 7.76% to ₹69,714 crore, covering higher interest payments, note printing, and employee costs.
- The contingency fund received ₹44,861.70 crore, maintaining available realized equity at 7.5% of the balance sheet.
- The balance sheet size rose by 8.2% to ₹76.25 lakh crore, driven by increases in gold holdings (52%), domestic investments (14.3%), and foreign investments (1.7%).
Assets and Liabilities
- Domestic assets constituted 25.73% of total assets, while foreign currency assets, gold, and loans constituted 74.27%.
- The share of gold in net foreign assets increased to 12% from 8.3%, mainly due to revaluation gains.
- Net credit to the government expanded due to liquidity injections through G-secs purchases.