RBI's core income growth takes a hit as global interest rates decline

The central bank's core earnings or interest income from its rupee and forex assets were up just 2.3% year-on-year in FY20 despite 30% rise in its assets during the year

The global decline in interest rates has begun to weigh on the Reserve Bank of India’s (RBI’s) earnings. The central bank’s core earnings, or interest income from its rupee and foreign exchange assets, were up just 2.3 per cent year-on-year in FY20, despite a 30 per cent rise in its assets during the same period.

India’s central bank earned an interest income of Rs 1.09 trillion in FY20 against Rs 1.06 trillion in FY19. Over the same period, its assets jumped to Rs 53.3 trillion from around Rs 41 trillion. This translated into an annual yield of 2 per cent on