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Informist, Thursday, May 29, 2025

MUMBAI - Following is a summary of stories on the Reserve Bank of India's annual report for 2024-25 (Apr-Mar):

India to stay fastest growing econ FY26 but downside risks remain

The Indian economy is poised to remain the fastest-growing major economy in 2025-26 (Apr-Mar), but trade fragmentation and geopolitical conflicts pose significant downside risk to the growth trajectory, the Reserve Bank of India said Thursday. Besides these, global financial market volatility, supply chain disruptions, and climate-induced uncertainties pose downside risks to the growth outlook and upside risks to the inflation outlook, the central bank said in its Annual Report for FY25. 

Gains from FX ops boosted record FY25 surplus transfer to govt

The Reserve Bank of India managed to transfer a record high surplus of INR 2.69 trillion for 2024-25 (Apr-Mar) because of a sharp rise in gains from foreign exchange transactions, data from the central bank's annual report showed. 

Central bank to review monetary policy framework in FY26

The Reserve Bank of India is set to review its inflation-targetting monetary policy framework in 2025-26 (Apr-Mar), it said in its annual report for FY25. The existing framework is set to lapse on Mar. 31, 2026.

Services trade balance, inward remittances to support India CAD

The Reserve Bank of India, in its annual report for 2024-25, said that a robust outlook for the country's services trade balance and inward remittance receipts will help the current account deficit to remain within sustainable limits in 2025-26 (Apr-Mar). The inclusion of India's sovereign bonds in global bond indices and liberalisation of foreign direct investment limits in the insurance sector should bolster foreign investment flows, the central bank said.

India's ongoing trade talks may aid export growth amid headwinds

India's existing free trade agreements, preferential trade agreements and the new trade deals that are currently under negotiation, may support growth in trade as exports are seen facing headwinds, the Reserve Bank of India said Thursday. India's exports face risks from rising geopolitical tensions, inward-looking policies and risk of potential tariff war among major economies, the central bank said in its Annual Report for 2024-25 (Apr-Mar).

Trade, weather-led uncertainties may hinder disinflation process

Retail inflation in India has moderated consistently over the last few months, but price stability faces several risks ahead, mainly from prolonged geopolitical conflicts and evolving trade and weather conditions, the Reserve Bank of India said in its annual report for 2024-25 (Apr-Mar).

E-rupee circulation jumps 4-fold in FY25, no volume in wholesale

The circulation of e-rupee jumped 334% in the financial year ended Mar. 31, driven entirely by the retail segment, data from the Reserve Bank of India's Annual Report for FY25 showed.

Total counterfeit bank notes declined 2.4% on year in FY25

The total number of fake Indian currency bank notes detected in the banking sector declined 2.4% on year to 217,396 in 2024-25 (Apr-Mar), the Reserve Bank of India said Thursday in its annual report for FY25.

Co-operative banks penalised most by RBI at INR 156 mln in FY25

The Reserve Bank of India imposed a total of 353 penalties worth INR 547.8 million on regulated entities in 2024-25 (Apr-Mar) for non-compliance with certain norms of the central bank, out of which co-operative banks were fined the most.  

To prepare framework for ethical adoption of AI in FY26

The Reserve Bank of India will focus on preparing a framework for responsible and ethical adoption of artificial intelligence in the financial sector in 2025-26 (Apr-Mar), the central bank said in its annual report for FY25 released Thursday. This follows the central bank's announcement in December on setting up of a committee to develop a framework for responsible and ethical enablement of artificial intelligence in the financial sector.

Sustained efforts will continue to deepen financial inclusion

Sustained efforts by the Reserve Bank of India will continue to further deepen financial inclusion, the central bank said in its annual report for 2024-25 (Apr-Mar).

Reviewing FEMA norms to rationalise framework for foreign loans

The Reserve Bank of India is reviewing certain guidlines of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 to rationalise the framework for external commercial borrowings, the central bank said in its annual report Thursday.

At $137.7 bln, India stays top remittance recipient in 2024

India continues to be the top recipient of remittances, with inward remittances to the tune of $137.7 billion in 2024, the Reserve Bank of India said Thursday. A robust outlook for India's services trade balance and inward remittance receipts is expected to keep the current account deficit well within sustainable limits during the financial year 2025-26 (Apr-Mar), the central bank said in its Annual Report for FY25.

Banks must address trading, banking book risks as rates moderate

Banks need to address trading and banking book risks, given the dynamic nature of interest rates, the Reserve Bank of India said. Banks need to be aware of the trading risks and banking risks, especially in light of moderation in their net interest margins, the RBI said in its annual report for 2024-25 (Apr-Mar).

Underwriting commission paid to PDs in FY25 at INR 157.8 mln

The government's expenditure on account of underwriting commission paid to primary dealers, including Goods and Services Tax, for auctions of dated government bonds fell to INR 157.8 million in the year ended March from INR 484.7 million the previous year. The fall in underwriting amount may be due to orderly market conditions and strong demand from investors, the Reserve Bank of India said in its annual report.

At INR 257 bln, PSU banks report most amount of FY25 frauds

A major part of the financial fraud amount reported by the banking sector were by public sector banks in 2024–25 (Apr–Mar), the Reserve Bank of India's annual report released on Thursday showed. On other hand, the total number of frauds reported fell to about 24,000 in FY25 from around 36,000 a year ago. State-owned banks reported frauds totalling INR 256.67 billion, up from INR 92 billion a year ago, constituting over 71% of the total amount involved in fraud cases reported by banks.

To set up multiple bids facility on e-Kuber 2.0 for OMOs, FX swap

The Reserve Bank of India's financial markets operations department is developing a 'multiple bids upload facility' in open market operation auctions in its core banking system e-Kuber 2.0, the central bank said in its annual report for 2024-25 (Apr-Mar). The set-up is in an advanced stage of development and would enable participants at such auctions to submit multiple bids by uploading a single file, it said.

To issue final norms on expected credit loss, co-lending in FY26

The Reserve Bank of India plans to roll out several key regulatory frameworks, including draft guidelines on the expected credit loss framework, in 2025-26 (Apr-Mar) as part of its ongoing efforts to strengthen the financial system. The central bank will also issue guidelines on co-lending arrangements, securitisation of stressed assets, harmonised norms on income recognition and asset classification and climate-related prudential and disclosure standards for banks and the last leg of Basel III norms, the RBI said in its annual report on Thursday.

Gold holdings rise by 57.48 tonnes in FY25 to 879.58 tonnes

The Reserve Bank of India's gold holdings rose by 57.48 tonnes in 2024-25 (Apr-Mar) to 879.58 tonnes. Of the holdings, 311.38 tonnes or over 35% was held as backing for notes, while the remaining 568.20 tonnes was treated as assets, the RBI said in its annual report for FY25 Thursday.

FPIs invest $17.4 bln in debt in FY25, usage below invest limits

India's debt segment saw steady inflows from foreign portfolio investors during the financial year ended March. A major part of the inflows was supported by the inclusion of Indian bonds in JP Morgan's Emerging Markets global bond index, which led to FPI inflows worth $17.4 billion in FY25, or nearly INR 1.5 trillion, according to the Reserve Bank of India's annual report. However, the utilisation remains below the available investment limit, the report noted.

To issue norms to address mis-selling of fincl pdts, svcs FY26

The Reserve Bank of India will issue guidelines in 2025-26 (Apr-Mar) to address mis-selling of financial products and services by regulated entities, the central bank said in its annual report for FY25 released Thursday. The guidelines will be applicable to regulated entities as well as third parties, RBI said.

DICGC settled INR 4.76 bln claims in FY25 for 43 urban co-op bks

The Deposit Insurance and Credit Guarantee Corp., a wholly owned subsidiary of the Reserve Bank of India, settled calims worth INR 4.76 billion for 43 urban co-operative banks, the RBI said in its annual report for 2024-25 (Apr-Mar) released Thursday. The corporation's Deposit Insurance Fund stood at INR 2.289 trillion as of Mar. 31, up 15.2% on year, the RBI said. 

Aim to expand scope, coverage of e-rupee in FY26

The Reserve Bank of India's FinTech department will look to offer new cases and features for the Central Bank Digital Currency in 2025-26 (Apr-Mar), the central bank said in its Annual Report for FY25. The department will also aim to broaden the scope and coverage of the Central Bank Digital Currency this financial year. 

To sharpen NBFC supervision, broaden fincl inclusion index FY26

The Reserve Bank of India aims to tighten supervision of non-banking financial companies and revamp financial inclusion measures in 2025-26 (Apr-Mar), the central bank outlined in its annual report for FY25.

See FY26 fisc consolidation driven by moderation in revenue spend

India's fiscal consolidation will be driven by moderation in revenue expenditure, according to the RBI's Annual Report for 2024-25 (Apr-Mar). The FY26 Budget pegged revenue expenditure at 11.0% of GDP, against 11.2% the previous year.

To review ideal liquidity level for effective policy transmission

The Reserve Bank of India will revisit the optimal level of systemic liquidity required for the effective transmission of monetary policy as part of its agenda for 2025-26 (Apr-Mar), the central bank said in its annual report on Thursday.

FX operations to ensure orderly movements in rupee exchange rate

In line with its earlier stance, the Reserve Bank of India's foreign exchange operations would be guided by the objective of ensuring orderly movements in the exchange rate of the rupee going forward, the central bank said Thursday.

To continue rupee internationalisation amid global protectionism

The Reserve Bank of India will continue to take steps to internationalise the use of the Indian rupee in 2025-26 (Apr-Mar), it said in the annual report for FY25. Amid the rise in "protectionism" across the globe, the central bank aims to promote the use of the Indian rupee for cross-border transactions by increasing its accessibility and acceptability.

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Compiled by Shruti Mohite

Filed by Vandana Hingorani

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