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From ₹2.69 lakh cr surplus to digital rupee pilots: Here's what RBI’s FY25 annual report outlines

From ₹2.69 lakh cr surplus to digital rupee pilots: Here's what RBI’s FY25 annual report outlines

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Amid global tension, the central bank of India's annual report for FY24- 25 delivered a record ₹2.69 lakh crore surplus to the government, by 27.3 per cent from the previous year’s ₹2.11 lakh crore. 

In a financial year marked by volatile global headwinds, the Reserve Bank of India (RBI) delivered a record ₹2.69 lakh crore ($32.28 billion) surplus to the government, by 27.3 per cent from the previous year’s ₹2.11 lakh crore ($25.32 billion).

According to the RBI Annual Report for FY2024–25, this sharp jump in net income was driven by higher foreign exchange transaction gains, interest from foreign securities, and a cautious hike in its contingency risk buffer.

While this windfall gives the Centre significant fiscal breathing space for its capital spending and welfare programs, the report also outlines a bold technology-forward vision for FY26 anchored around digital currency pilots, AI deployment, and cross-border innovation.

Stronger balance sheet, bigger dividend

As per the annual report, the central bank’s net income surged 27.3 per cent year-on-year to ₹2.69 lakh crore ($32.28 billion) in FY25, up from ₹2.11 lakh crore ($25.32 billion) the previous year. This includes gains of ₹11.1 lakh crore ($133.2 billion) from foreign exchange transactions, and ₹9.7 lakh crore ($116.4 billion) in interest income from foreign securities.

The RBI’s balance sheet expanded 8.2 per cent to ₹76.25 lakh crore ($915 billion), with foreign assets accounting for over 74 per cent of the total. Notably, the central bank’s gold holdings rose by 57.5 metric tonnes to 879.6 metric tonnes as of March 2025.

A significant portion of the income of ₹2.68 lakh crore ($32.16 billion) has already been transferred to the central government as surplus, a move expected to ease fiscal pressures, support capital spending, and inject liquidity into the banking system by early July, according to economists cited in the report.

The report also highlights that the Contingency Risk Buffer (CRB), which helps cushion against economic shocks was maintained at 6.5 per cent, the same level as FY24.

Inflation, growth, and monetary policy: RBI’s balancing act

The RBI’s latest report offers a cautiously optimistic view of the Indian economy. According to the central bank, headline inflation is likely to converge to the 4 per cent target over the next 12 months, thanks to a favourable mix of macroeconomic conditions.

These include easing global supply chain pressures, softening of international commodity prices, and above-normal rainfall boosting agricultural output.

At the same time, GDP growth for FY26 is projected at 6.5 per cent, with the momentum driven by private consumption, healthy corporate and banking balance sheets, and the government’s continued focus on capital expenditure.

In response to moderating inflation and subdued economic momentum, the RBI has already cut the policy repo rate by 50 basis points since February, and adopted a ‘growth-supportive’ accommodative stance in April.

However, the path forward is not without risks. The RBI flagged a range of external headwinds, rising protectionism, geopolitical conflicts, and volatile financial markets that could threaten both inflation and growth targets. Of particular concern is the return of US tariffs under President Donald Trump, which have added uncertainty to global trade flows and emerging market stability.

According to the report, “While the outlook remains promising, downside risks to growth and upside risks to inflation persist due to evolving global dynamics.”

Digital rupee, FX platform, and CBDC pilots: What’s next for RBI?

The RBI is making it clear that India’s digital financial future is no longer experimental, it’s strategic.

According to the report, the RBI will expand the pilots for central bank digital currency (CBDC) in both retail (e₹-Retail) and wholesale (e₹-Wholesale) segments. Building on groundwork laid over the past two years, the central bank now plans to test cross-border CBDC transactions, both bilateral and multilateral to make global payments faster, more transparent, and more secure.

In addition, the RBI will link its FX-Retail platform with Bharat Connect, a move aimed at democratising access to forex markets for small businesses and individual users. This is particularly significant as India’s foreign exchange reserves peaked at $704 billion in September 2024, and the RBI was the top net seller of forex among Asian central banks in January 2025, according to estimates from Nomura and DBS Bank.

The digital push doesn’t end there. The RBI will also roll out new CBDC use cases, such as B2B payments under the Unified Ledger Interface (ULI), and scale up Milehunter.ai™, its AI-driven analytics platform. To accompany this digital acceleration, the central bank will also develop a framework for the responsible and ethical use of AI in the financial sector.

These pilots and platforms, the report notes, are designed to overcome persistent inefficiencies in the current system, especially those related to turnaround time, traceability, and cross-border transaction costs.

Bank fraud amount triples despite drop in cases

One of the more concerning takeaways from the report is the sharp rise in the value of bank frauds.

While the total number of fraud cases declined by 34 per cent to 23,953 in FY25, the value of frauds tripled to ₹36,014 crore ($432.17 million), up from roughly ₹12,000 crore ($144 million) in FY24.

According to the RBI annual report, this spike was largely due to the reclassification of 122 legacy fraud cases worth ₹18,674 crore ($224.08 million), after a March 2023 Supreme Court ruling mandated re-examination.

Private sector banks reported the highest number of fraud incidents at 14,233 cases, accounting for 59.4 per cent of total frauds. But in terms of value, state-owned banks bore the brunt, accounting for ₹25,667 crore ($307.99 million) (71.3 per cent of total fraud value) compared to ₹10,088 crore ($121.05 million) by private lenders.

Most of these frauds occurred in two areas:

• Digital payments (cards/internet): 13,516 cases, ₹520 crore ($6.24 million)

• Loan/advances segment: 7,950 cases, ₹33,148 crore ($398 million)

The RBI noted that while digital frauds dominate in private banks, loan-related frauds remain concentrated in public sector banks, raising concerns about credit risk monitoring and recovery.

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