In the Financial Year 2024-25, India’s Central bank, the Reserve Bank of India (RBI), transferred ₹2,68,590.07 crore as surplus to the Central Government. Last year, it was just ₹2,10,873.99 crore and the rise in the surplus was approximately 27.37% over the previous year.
Further, RBI mentioned in its report that the size of the balance sheet rose by 8.20%, that is, ₹5,77,718.72 crore, from ₹70,47,703.21 crore as on March 31, 2024 to ₹76,25,421.93 crore as on March 31, 2025.
The rise in the assets was attributed to an increase in gold (52.09%), domestic investments (14.32%) and foreign investments (1.70%). On the liabilities side, there was a rise in notes issued, revaluation accounts and other liabilities by 6.03%, 17.32% and 23.31%, respectively. While the domestic assets constituted 25.73%, the foreign currency assets, gold (including gold deposit and gold held in India) and loans and advances to financial institutions outside India were 74.27% of total assets as on March 31, 2025.
Printing of Notes
The supply of notes increased from 2,43,000 lakh pieces (2023-24) to 3,03,000 lakh pieces (2024-25), which is nearly a rise of 24.69%. Further, the cost (expenditure) of printing the banknotes rose from ₹5,101.40 crore (2023-24) to ₹6,372.82 crore (2024-25.)
The RBI increased its Contingency Fund by nearly ₹1.14 lakh crore from ₹4.28 lakh crore to ₹5.42 lakh crore. The contingency fund is the amount earmarked for covering any unforeseen future expenses. Contingency Fund can is also known as rainy-day fund in the layman’s parlance. If the amount allocated for contingency funds increases, it shows that the RBI has strengthened its financial cushion and has planned carefully for tougher times ahead. In its annual report, RBI has mentioned that a provision of ₹44,861.70 crore was made and transferred to Contingency Fund and that no such provision was made towards Asset Development Fund (ADF). The ADF was created in the year 1997-98 and as on March 31, 2025, the balance in ADF was at ₹22,974.68 crore which was same as on March 31, 2024, as there was no provision for the year 2024-25.
Economic Capital Framework (ECF)
RBI makes profit. RBI transfers funds to the Central Government also. So, who decides what amount to be retained by the RBI and what must be transferred to the Central Government. Here comes the role of the Economic Capital Framework, in short, the ECF. It’s the formula based on which this decision of retaining funds and transferring funds is taken. The ECF is the RBI’s buffer capital as a percentage of its balance sheet.
In its annual report, RBI has mentioned, “The ECF requires Contingent Risk Buffer (CRB) to be maintained in the range of 4.5% to 7.5% of the size of the balance sheet. The Central Board approved that CRB may be maintained at 7.5% of the size of the balance sheet of the Reserve Bank for the year 2024-25.”
Balance Sheet
The total assets of the Reserve Bank of India increased from ₹70,47,703 to ₹76,25,421 crore, which is nearly 8%.
Gold
In its annual report, the RBI has said that as on March 31, 2025, the total gold held by the Reserve Bank of India was 879.58 metric tonnes when compared to 822.10 metric tonnes as on March 31, 2024. This shows an increase of 57.48 metric tonnes of gold during the year. Of the total gold, 311.38 metric tonnes are held as backing for Notes Issued as on March 31, 2025. The RBI mentioned that the rise in the gold’s value is owing to addition of 3.35 metric tonnes of gold, increase in price of gold and depreciation of INR vs U.S. dollar.
RBI said the value of gold imports rose by 27.4% (year-over-year) in 2024-25 to U.S. $58 billion, owing to higher international prices (30%) though the total volume contracted.
e₹ in circulation
The value of e₹ in circulation increased by 334% during 2024-25. RBI’s annual report mentioned, “The value of banknotes in circulation in digital form e₹-Retail (e₹-R) stood at ₹1,016.46 crore as on March 31, 2025 as compared to ₹234.04 crore as on March 31, 2024.” At the end of March 2025, the pilot projects in the e₹-Retail segment was expanded to 17 banks and 60 lakh users since its inception in December 2022. Further, to improve adoption and distribution, a few non-banks have also been allowed to offer Central Bank Digital Currency (CBDC) wallets. Under the Subhadra Yojana of Odisha Government, so far, e₹ has been used as a payment channel for around 88,000 beneficiaries.
Programmability features of e₹
The RBI has added offline facility and other smart features to the retail version of e₹. That is, the e₹ can now be used without the internet and this is great in remote areas. Moreover, the RBI has said that the money in the e₹ could be programmable for specific uses such as food, fuel, school fees etc. These programmability features are being tested in schemes such as Direct Benefit Transfers, especially to farmers, subsidies and other employee allowances.
Real GDP growth
In its annual report, the RBI has mentioned that though the real Gross Domestic Product (GDP) growth moderated to 6.5% in 2024-25, India remained the fastest growing large economy. It said, “Economic activity was bolstered by an improvement in consumption demand and net exports on the expenditure side and buoyant services sector and recovery in agricultural production on the supply side.” The RBI said the real GDP growth of India slowed down from 9.2% in the previous financial year to 6.5% in FY 2024-25.
On the expenditure side
The effective capital expenditure registered a growth of 5.2% in excess to the 19.8% in 2023-24. The growth in revenue expenditure (RE) was 5.8% in 2024 25. Revenue expenditure rose by 5.8%. The expenditure on pensions and retirement benefits increased to 0.83% of GDP in 2024-25. RBI said, “The expenditure incurred on security printing during 2024-25 was ₹6,372.8 crore as against ₹5,101.4 crore during the previous year mainly due to increase in indent for printing of banknotes.”
Consumption
Growth in Private Final Consumption Expenditure (PFCE) rose to 7.6%, mainly due to rural consumption demand. In the FY 2024-25, the PFCE’s share in real GDP increased to 56.7%. Improved agricultural performance in turn boosted rural demand and it was visible from improved sales of two-wheelers, motorcycles and tractors, and growth of Fast-Moving Consumer Goods (FMCG) companies in rural areas. RBI said that the urban demand lost pace and it was reflected in sales of consumer non-durables, retail passenger vehicles and volumes of FMCGs in urban areas. Government Final Consumption Expenditure (GFCE) grew at 3.8% in 2024-25, following an expansion of 8.1% during 2023-24.
Investments and savings
The rate of Gross Domestic Investment in the Indian economy, which is measured by the ratio of Gross Capital Formation (GCF) to GDP at current prices, declined to 31.4% in 2024-25 from 32.6% in 2023-24. The reason being the reduction in net capital inflow from the rest of the world (ROW), which fell to 0.7% of GDP in 2024-25 from 2% in 2023-24.
RBI mentioned, “Gross domestic saving as per cent to Gross National Disposable Income (GNDI) remained steady at 30.3% in 2023-24 primarily due to a decline in general government’s dissaving.”
Reserve Money
The Reserve Money (RM) is also known as RBI’s foundation, base money, high-powered money or monetary base. It is the total money created by the Reserve Bank of India and it is on this base money the RBI builds its money supply. The RM, adjusted for the first-round impact of change in Cash Reserve Ratio (CRR), stood at 5.8% in 2024-25 as compared to 6.7% in 2023-24. In its annual report, the RBI has mentioned that the growth in Currency in Circulation (CiC), which is the major constituent of RM (now 76.9% share) recovered from 4.1% in 2023-34 to 5.8% in 2024-25. The reason the RBI said is that the impact of withdrawal of ₹2,000 banknotes from circulation, initiated in May 2023, dissipated.
According to RBI: “The CRR was reduced from 4.5% to 4% in two tranches of 25 basis points (bps) each effective fortnight beginning December 14, 2024 and December 28, 2024. Growth in bankers’ deposits with the Reserve Bank (20.8% share in RM), i.e., balances maintained by banks to meet their CRR requirements, declined by 6.5% in 2024-25, reflecting the reduction in CRR by 50 bps and moderation in bank deposits. Adjusted for the first-round impact of the CRR reduction, bankers’ deposits rose by 4.4%.”
So, I hope I have pretty much covered the nearly 300-paged annual report in a nutshell. Of course, there’s much more to it. For further details, click on the RBI’s annual report 2024-2025.
Cheers! Catch you later with another interesting and informative topic. Until then…