The Reserve Bank of India’s (RBI) Annual Report 2024-25 has been released and presented to the Central Government under the Section 53(2) of the RBI Act,1934.
- It is a report of the Central Board of Directors on the working of the RBI for the year ended March 31,2025.
- This report presents a complete analysis of the domestic and global environment, the working and operations of the RBI and the future prospects.
Key highlights of the report:
RBI’s balance sheet increases 8.2% to Rs 76.25 lakh crore in FY25
i.The size of the balance sheet increased by 8.21% from Rs. 70.47 lakh crores as on March 31,2024 to Rs. 76.25 lakh crores as on March 31,2025. A provision of Rs 44,861.70 crore was made and transferred to the Contingency Fund.
ii.Increase on asset side was due to rise in gold (52.09%), domestic investments (14.32%) and foreign investments (1.70%).
- On liability side, expansion was due to increase in notes issued, revaluation accounts and others.
iii.The income for the Financial Year (FY) 2025 increased by 22.77% to Rs 3.38 lakh crore from Rs 2.76 lakh crore in 2023-24, recording an overall surplus of Rs.2,68,590.07 crores.
- Also, expenditure has also shown an increasing trend, with an increase of 7.76% to Rs 69,714.02 crore in 2024-25 from Rs 64,694.33 crore in 2023-24.
Cash to GDP ratio declines to 11.2%
i.The Currency- Gross Domestic Product (GDP) ratio continued its downward trajectory, declining to 11.2% in FY25 from 11.7 % in the previous year, reflecting the rising adoption of digital payments and the growing footprint of Central Bank Digital Currency (CBDC).
ii.The growth of the currency in circulation, the major constituent of reserve money with a share of 76.9 per cent, recovered to 5.8 per cent during 2024-25 from 4.1 per cent in 2023-2024. Retail digital payments rose 17.9 per cent in value terms and 35 per cent in volume terms during 2024-25.
- The value of retail CBDC in circulation increased by 334% to Rs. 1016.5 crores during FY25.
iii.The total value of bank notes in circulation stood at Rs. 36.86 lakh crores at the end of FY25, with the value and volume increasing by 6.0 % and 5.6 %, respectively, over the previous years.
- Rs. 500 denomination constituted the highest share in both volume and value terms.
FPIs’ investment in corporate bonds rises 11.4% in FY25
i.The outstanding Foreign Portfolio Investment(FPI) in corporate bonds at the end of March 2025 was Rs. 1.21 lakh crore, up 11.4% from the previous year.
ii.However, the utilisation of the approved limit declined to 15.8%, from 16.2% the previous year, mainly due to a higher overall limit and not due to reduced investment.
Currency printing expenditure rises 25% to Rs.6,372.8 crore in FY25
i.The expenditure incurred on currency printing during FY25 was Rs. 6,372.8 crore as against Rs.5,101.4 crore during FY24.
- The main reason for this rise is due to an increase in indent (order) for printing of banknotes.
Counterfeit notes of Rs 500 denomination surged 37% YoY in FY25
i.During FY25, out of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 4.7 per cent were detected at the RBI.
ii.The number of counterfeit notes in the Rs.200 and Rs.500 denominations increased by 13.9% and 37.3% respectively, while counterfeit notes in other denominations declined.
India’s real GDP growth projected at 6.5% in FY 2025-26
i.India’s economic outlook for FY26 remains strong, driven by rising consumption, robust capex, healthy bank and corporate balance sheets, and resilient services.
- However, global trade tensions, geopolitical risks, and market volatility may affect growth and inflation.
ii.Taking into account the above factors, the RBI projected the real GDP growth for FY26 at 6.5%.
RBI confident of sustaining inflation below 4% in FY26
An above-normal monsoon and high reservoir levels support a positive inflation outlook, though climate shocks and global uncertainties pose risks.
- Due to the above factors the RBI projects inflation at 4% in FY26, with balanced risks.
RBI Annual Report Flags Cybersecurity, Customer Protection as Top Priorities in Banking
To combat the increasing instances of fraud in digital payments, the RBI proposed to introduce an exclusive internet domain for the banks in India in the form of ‘bank.in’ on February 7, 2025.
- The exclusive internet domains would help identify cybersecurity threats and malicious activities like phishing and would also considerably reduce instances of financial loss to the general public.
UPI expands its universe with circles, global links, and credit access
i.The National Payment Corporation of India (NPCI) introduced ‘UPI Circle’, which enables primary user to allow another individual (secondary user) to make Unified Payment Interface (UPI) transactions up to a limit from the primary user’s bank account, without the need for the secondary user to have a separate bank account linked to UPI.
ii.RBI recently permitted the Small Finance Banks (SFB) to extend pre-sanctioned credit lines through UPI.
- Through this, now SFB can make available low-ticket, low-tenor products to ‘new-to-credit’ customers
iii.Inorder to expand the global outreach of UPI, the RBI has been facilitating the linkage of UPI with the Fast Payment System (FPS) of other countries on a bilateral basis, enabling both inward and outward remittance payments.
Net household financial savings rebound, India to lead growth in FY26
The gross financial savings of households increased to 11.2 % of Gross National Disposable Income (GNDI) in 2023-24 from 10.7 % in the previous year.
- Resultantly, the net household financial savings improved to 5.1 % of GNDI in 2023-24 from 4.9 % in the previous year.
Value of gold with RBI rises 57.12% to Rs 4.32 lakh crore in FY25
The value of gold held as an asset of the Banking Department increased by 57.12% to Rs. 4,31,624.80 crore as on March 31, 2025.
- This increase is on account of addition of 54.13 Metric Tonnes (MT) of gold and also due to increase in price of gold and depreciation of INR vis-à-vis USD.
Bank fraud value trebles in FY25 despite drop in cases
During FY25, though the number of fraud cases reported had reduced, the fraud amount involved tripled to Rs. 36,014 crores compared to the previous year.
- This huge increase was mainly due to removal of fraud classification in 122 cases amounting to Rs.18,674 crore reported during previous financial years and reporting afresh during the current financial year after re-examination.
UCBs see Credit Surge, Stronger Capital & Lower bad loans
The credit growth of urban cooperative banks (UCBs) improved as at end-December 2024. The financial performance of UCBs also improved on the back of strengthened capital buffers and lower Gross Non-Performing Asset (GNPA) ratio.Along with it various measures were taken by RBI to strengthen UCBs, such as:
- The coverage of UCBs under Risk Based Approach (RBA) was aligned with the four-tiered regulatory framework and expanded to include Tier 3 and Tier 4 UCBs constituting around 60 % of the total deposit size of the sector.
- The Prompt Corrective Actions (PCA) framework has been made applicable to all UCBs in Tier 2, Tier 3 and Tier 4, except UCBs under all-inclusive Directions.
Various measures were undertaken to promote use of INR and trading countries currency for cross-border transactions
In order to promote the settlement of cross-border transactions in INR and local/national currencies, the following measures were undertaken:
- Permitting Persons of Resident Origin (PROIs) to open Special Non-Resident Rupee (SNRR) accounts with overseas branches of Authorised Dealer (AD) banks
- Enabling foreign investment (including Foreign Direct Investment (FDI) and portfolio investment) through various repatriable INR accounts.
- Local Currency Settlement (LCS) agreement signed with the Central Bank of UAE , Bank Indonesia, Maldives Monetary Authority and Bank of Mauritius.
Resource mobilisation through preferential allotments and qualified institutional placements doubles Rs 2.2 lakh crore in FY25
In the primary segment of the equity market, resource mobilisation through preferential allotments and qualified institutional placements (QIPs) rose to Rs. 2.2 lakh crore during 2024-25 from Rs.1.1 lakh crore during the previous year.
- Resource mobilisation through initial public offerings (IPOs), follow-on public offers (FPOs) and rights issues also increased to Rs. 2.1 lakh crore from Rs. 0.8 lakh crore during the previous year.
RBI to link foreign exchange platform with Bharat Connect to broaden digital access
To expand the reach of FX-Retail platform and enhance user experience, the linking of this platform with Bharat Connect operated by the NPCI Bharat Connect shall be facilitated.
RBI to continue liquidity operations in line with policy stance
RBI mentioned that the liquidity operations would continue to be in sync with the stance of monetary policy. While the foreign exchange operations would be guided by the objective of ensuring orderly movements in the exchange rate of the INR.
New trade deals with US, EU, others may support growth
As per the report, it is expected that India’s export sector is expected to encounter some headwinds from rising geopolitical tensions, inward-looking policies and risk of potential tariff-war among major economies.
- However, India’s participation in 14 free trade agreements (FTAs) and six preferential trade agreements (PTAs), along with the new trade deals under negotiation with the United States of America (USA), Oman, Peru and the European Union (EU) may support growth in trade.
About Reserve Bank of India
It was established on 1st April 1935 in accordance with the provisions of the RBI Act,1934.
Governor – Sanjay Malhotra
Headquarters – Mumbai, Maharashtra
