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Informist, Thursday, May 29, 2025

 

MUMBAI – Following are the highlights of Reserve Bank of India's Annual Report for 2024-25 (Apr-Mar), released Thursday.

 

CENTRAL BANK'S ACCOUNTS

* Balance sheet INR 76.25 tln on Mar 31, up 8.2% YoY
* Provision of INR 448.61 bln moved to contingency fund FY25
* FY25 net income INR 2.69 tln vs INR 2.11 tln FY24

* FY25 total expenditure INR 697.14 bln vs INR 646.94 bln FY24
* Interest income from foreign securities INR 970.07 bln in FY25
* CONTEXT: RBI FY24 interest income from foreign securities was INR 653.3 bln
* Gain from foreign exchange transactions INR 1.11 tln in FY25
* CONTEXT: RBI gained INR 836.16 bln from foreign exchange transactions FY24
* FY25 income from foreign sources INR 2.59 tln, up 38.1% YoY
* Domestic assets constituted 25.73% of balance sheet as on Mar 31
* FY25 net income from domestic sources INR 794.71 bln, down 9.8% YoY
 

MACROECONOMY

* India econ showed resilience in FY25 on proactive policy measures
* India econ showed resilience amid persisting geopolitical tensions

* To analyse financial markets to guide operations strategies in FY26
* Global fincl mkt volatility a risk to growth, upside risk to inflation

* Global econ likely to grow below historical average of 3.7% in 2025
* CPI eased but pace of disinflation hurt by high, volatile food prices
* Trade fragmentation a risk to growth, upside risk to inflation
* Supply chain disruptions a risk to growth, upside risk to inflation
* Fiscal consolidation continued both at Centre, state level in FY25
* Climate-induced uncertainties risk to growth, upside risk to inflation

* Domestic econ activity expected to strengthen from Apr-Sept FY25 lows
* Indian econ poised to remain fastest-growing major economy in FY26
* Headline inflation expected to ease and move towards target in FY26
* Durable price stability a prerequisite for sustainable high growth
* Trade policies, subdued demand, high input costs pose risks to growth

* Trade protectionism, policy uncertainty to hit global econ growth

* India FY26 econ outlook promising on revival in consumption demand
* Ongoing geopolitical tensions to also hit global econ growth in 2025

* External sector strength, modest CAD supported fincl stability FY25

* To improve assessment of sectoral credit by NBFCs in FY26
* Industrial outlook survey shows mfg cos reported improved demand in Q4
* To develop growth-at-risk model to see fincl conditions' growth impact
* External benchmarking loans by NBFCs to some sectors not seen feasible
* Govts face tough job of tweaking monetary, fisc steps to aid growth
* Food inflation likely to soften going forward on better rabi crop
* High farm output on likely good monsoon augurs well for FY26 inflation
* Easing supply chain pressures augur well for FY26 inflation outlook
* Softening global commodity prices bode well for FY26 inflation outlook
* Evolving trade dynamics, weather conditions to impact disinflation
* To ensure smooth conduct of govt's market borrowing programme FY26

* CAD likely to remain eminently manageable in FY26

* Evolving trade dynamics demand continuous vigil, careful monitoring
* Prolonged geopolitical issues demand careful monitoring
* Mfg sector may gain traction in FY26 on improved domestic demand
* Mfg sector may gain traction in FY26 on higher capacity utilisation
* Mfg sector may gain traction in FY26 on consumer, business optimism
* Global growth outlook clouded by heightened trade tensions
* Global growth outlook clouded by elevated policy-led uncertainty
* Need careful monitoring of food price outlook on rising climate shocks
* FY26 CPI inflation projected at 4% with risks evenly balanced
* Benign CPI outlook, moderate growth warrant policy to support growth
* US tariff impact, reciprocal steps by others to impact fincl mkts FY26
* States' fisc outlook remain positive FY26 with total fisc gap at 3.3%
* Ongoing trade pact talks with many nations may aid greater trade share
 

MONETARY POLICY

* To review the monetary policy framework in FY26
* To revisit optimal liquidity level for effective policy transmission
* Monetary policy committed towards achieving durable price stability

FINANCIAL SECTOR, MARKETS

* Got feedback on review of framework for Electronic Trading Platform
* Finalising framework for Electronic Trading Platform authorisation

* To issue harmonised income recognition norms for regulated units FY26
* To issue harmonised asset classification norms for regulated units FY26

* To issue harmonised provisioning norms for regulated entities FY26

* Developing module in e-Kuber 2.0 for FX swap auctions
* To expand bidding, payment options for invest on retail direct portal
* To issue final co-lending norms in FY26 after examining comments
* To issue final stressed asset securitisation norms in FY26
* To issue draft guidelines on expected credit loss in FY26
* Preparing revised framework for authorised persons under FEMA
* To implement final phase of Basel III norms in FY26
* Banks' MCLR may undergo policy rate linked adjustments with some lag
* To review lenders' non-fund contingent facilities in FY26
* India fincl mkts may see sporadic volatility on turbulent global mkts
* To issue prudential norms on climate risk, disclosure for banks FY26
* To identify frictions in beneficiary leg of cross-border payments
* Exports may see some headwinds from rising geopolitical tensions
* Revival in pvt investment can drive increased demand for bank credit
* Reviewing FEMA norms for rationalisation of ECB framework
* To issue norms to address mis-selling of fincl pdts, svcs in FY26
* Resilient services exports, inward remittances likely to cushion CAD
* To expand scope, coverage of CBDC in FY26
* To develop e-Kuber 3.0 for primary auction, public debt management
* To prepare framework for ethical adoption of AI in fincl sector FY26
* Balance sheet size moderated to 22.8% of GDP Mar-end vs 23.5% yr ago
* To develop cash flow analysis to boost liquidity stress test for bks
* Reviewing FEMA norms draft regulations to simplify guarantees issued
* To develop framework to make lenders' digital channels resilient
* To review framework for mode of payment, reporting of non-debt items
* To examine migration of NBFCs to risk-based supervision in FY26
* FPIs invested INR 1.5 tln in debt instruments in FY25
* Began measures to give rupee liquidity for cross-border transactions
* DICGC settled INR 4.76 bln claims in FY25 for 43 urban co-op banks
* DICGC's Deposit Insurance Fund at INR 2.289 tln on Mar 31, up 15.2%
* See FY26 fisc consolidation driven by moderation in revenue spending
* Committee set up to suggest improvements in reporting FX transactions
* Global econ outlook for 2025, 2026 remains clouded by many challenges
* Ample FX reserves, modest external debt buffers against capital flows
* High sovereign debt in systemic economies leading to spikes in yields
* Revised liberalised remittance scheme with changes in process

* Fincl system well-capitalised on fincl cos' healthy balance sheet
* FPI investment in debt mkt up but utilisation below investment limits
* Debt mkt saw FPI inflows of $17.4 bln FY25 on bond index inclusion
* To review insurance regulations, deposit regulations

* Bks need to address trading, banking book risks on interest rate risk
* To consolidate, streamline norms for efficiency, easing compliance
* To continue with supervisory steps for early identification of risks
* Exploring CBDC pilots for cross-border payments to improve efficiency
* Domestic payment systems internationalisation to be key priority
* To continue intl tie-ups for internationalising domestic payment system
* To enhance security, fraud prevention in FY26 as digital payments rise
* To review Financial Inclusion Index in FY26

* Increase in term deposit rates mainly driven by bulk deposit rates

* Share of external benchmark-linked loans in bk loans rose more FY25

 

FOREX, LIQUIDITY 

* To review liquidity management framework
* To review liquidity management framework in FY26

* Review of liquidity management framework going on
* To analyse and refine forecast of liquidity conditions FY26
* To develop in-house liquidity stress test framework for NBFCs in FY26
* To keep system liquidity adequate to meet needs of economy

* To undertake liquidity mgmt operations in sync with MPC stance

* To continue liquidity mgmt ops  to meet productive needs of economy

* FX intervention aimed at maintaining orderly market conditions

* To undertake FX operations to curb excessive volatility in dlr/rupee

* To continue rupee internationalisation FY26 amid globals protectionism
 

End

 

Compiled by Vinodini Yadav
Filed by Vandana Hingorani

 

 

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