RBI's net income rises 27.5% to ₹2.69 trillion in FY25 on forex gains

The Indian central bank's net income rose 27.5 per cent in the last financial year to Rs 2.69 trillion  ($31.4 billion) as gains from foreign exchange transactions and interest earned on foreign securities surged, its annual report showed on Thursday.

The Reserve Bank of India saw a gain of Rs 1.11 trillion from foreign exchange transactions in the year ending March 2025 versus Rs 83,616 crore in the previous year. Interest income from foreign securities rose to 970.07 billion rupees from Rs 65,328 crore a year earlier. 

The size of the RBI's balance sheet increased by 8.2 per cent to Rs 76.25 trillion.

"In FY25, the surge in dollar selling was due to FY25 balance of payments turning negative," said Gaura Sen Gupta, chief economist at IDFC First Bank.

"In FY26, we expect balance of payments to be a small positive. Hence the quantum of dollar selling is expected to be moderate."

Last week, RBI's board approved the transfer of a record Rs 2.69 trillion as surplus to the government for the last fiscal year as it opted to raise its contingency risk buffer under a revised economic capital framework.

In fiscal year 2019, the RBI adopted a new economic capital framework that required it to maintain a contingency risk buffer of 5.5 per cent-6.5 per cent of its balance sheet. 

Last week, the board changed the range of the contingency risk buffer to 6 per cent plus or minus 1.5 percentage points to provide adequate flexibility and to ensure smoothening of surplus transfer.

IDFC Bank's Sen Gupta expects the RBI's dividend this fiscal year to remain similar to levels seen in the previous two years, as interest income will remain substantial and provisioning stable.

For the last fiscal year, the RBI's total expenditure rose 7.76 per cent to Rs 69,714 crore, largely due to higher interest spends, and costs related to employees and printing of notes.