RBI’s balance sheet expands 8.2% in 2024-25 on robust foreign earnings | Business News

The balance sheet of the RBI plays a critical role in the functioning of the country’s economy, largely reflecting the activities carried out by the regulator, including the issuance of currency as well as monetary policy and reserve management.

During 2024-25, its income grew by 22.77 per cent to Rs 3.38 lakh crore from Rs 2.76 lakh crore in 2023-24. The expenditure increased by 7.76 per cent to Rs 69,714.02 crore in 2024-25 from Rs 64,694.33 crore as on March 31, 2024, according to the RBI’s annual report.

The income from foreign sources surged 38.07 per cent to 2.59 lakh crore in 2024-25 from Rs 1.87 lakh crore in 2023-24. The rate of earnings on foreign currency assets was 5.31 per cent in the year 2024-25 as compared to 4.21 per cent in the previous year.

The RBI’s earnings from domestic sources declined 9.80 per cent from Rs 88,101.12 crore in 2023-24 to Rs 79,470.54 crore in 2024-25, mainly due to a decrease in interest on holding of rupee securities. The interest on holding of rupee securities, including oil bonds, dipped 7.63 per cent to Rs 85,524.67 crore.

In the RBI’s balance sheet, the increase on the assets side was due to a rise in gold, domestic investments and foreign investments by 52.09 per cent, 14.32 per cent and 1.7 per cent, respectively. On the liabilities side, expansion was due to an increase in notes issued, revaluation accounts, and other liabilities by 6.03 per cent, 17.32 per cent and 23.31 per cent, respectively.

Domestic assets constituted 25.73 per cent while foreign currency assets, gold (including gold deposit and gold held in India) and loans and advances to financial institutions outside India constituted 74.27 per cent of total assets as on March 31, 2025 as against 23.31 per cent and 76.69 per cent, respectively, as on March 31, 2024.

The total gold held by the RBI was 879.58 metric tonnes as on March 31, 2025, as compared to 822.1 metric tonnes as on March 31, 2024, reflecting an increase of 57.48 metric tonnes of gold during the year.

The RBI’s ‘other liabilities’ increased by 23.31 per cent from Rs 2.61 lakh crore as on March 31, 2024 to Rs 3.21 lakh crore as on March 31, 2025, primarily due to an increase in surplus payable to the Central Government. The RBI transferred Rs 2.69 lakh crore worth of surplus to the government for the year 2024-25, compared to Rs 2.11 lakh crore paid during 2023-24.

As per the revised Economic Capital Framework (ECF), Contingent Risk Buffer (CRB) needs to be maintained in the range of 4.5-7.5 per cent of the size of the balance sheet.

Last week, the RBI’s central board approved that CRB may be maintained at 7.5 per cent of the size of the balance sheet of the Reserve Bank for the year 2024-25. Accordingly, a provision of Rs 44,861.7 crore was made and transferred to the contingency fund (CF) during 2024-25.

The contingency fund is a specific provision meant for meeting unexpected and unforeseen contingencies, including depreciation in value of securities, risks arising out of monetary/exchange rate policy operations, systemic risks and any risk arising on account of special responsibilities enjoined upon the Reserve Bank.

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