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Informist, Friday, May 29, 2026

 

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--RBI: Balance sheet INR 91.97 tln on Mar 31, up 20.6% YoY 
--RBI: Provision of INR 1.09 tln moved to contingency fund FY26 
--RBI: FY26 net income INR 2.87 tln vs INR 2.69 tln FY25
--RBI: FY26 gross income INR 4.28 tln vs INR 3.38 tln FY25 
--RBI: FY26 total expenditure INR 1.41 tln vs INR 697.14 bln FY25 
--RBI: Gain from foreign exchange transactions INR 1.69 tln in FY26 
--CONTEXT: RBI gained INR 1.11 tln from foreign exchange transactions FY25 
--RBI: Interest income from foreign securities INR 1.08 tln in FY26 
--CONTEXT:RBI FY25 interest income from foreign securities was INR 970.07 bln 
--RBI: FY26 income from foreign sources INR 3.28 tln, up 26.6% YoY 
--RBI: FY26 net income from domestic sources INR 1.00 tln, up 25.9% YoY 
--RBI: Net unrealised loss on FX forwards INR 434.03 bln FY26 vs gain FY25

 

NEW DELHI – The Reserve Bank of India's gains from its foreign exchange transactions boomed in financial year 2025-26 (Apr-Mar), its annual report released Friday showed. This led to a 50% rise in its other income and drove its surplus transfer to the government to a record high, the data showed.

 

The RBI's gains from foreign exchange operations rose 52% on year to INR 1.69 trillion. Consequently, its other income zoomed by half to INR 1.93 trillion.

 

In FY26, the RBI's gross income surged 26.4% on year to INR 4.28 trillion. However, the central bank's expenditure, including provisions, more than doubled to INR 1.41 trillion. The surplus transfer to the government rose to INR 2.87 trillion for FY26, in line with the government's Budget estimate, from INR 2.69 trillion for FY25. This represented the RBI's net income for the financial year. 

 

Meanwhile, interest income rose 11.8% on year to INR 2.36 trillion in FY26. This was led by a 30% increase in interest income on domestic sources at INR 1.00 trillion as its holdings of rupee securities rose by more than half. Meanwhile, interest income from foreign sources – the larger part of its annual income – rose only marginally to INR 1.35 trillion.

 

Last week, the RBI's board had approved the accounts. The central bank's Contigent Risk Buffer was reduced to 6.5% in FY26 from 7.5% in FY25, which effectively freed up around INR 920 billion to enhance the surplus transfer. The central bank's balance sheet jumped 20.6% on year to INR 91.97 trillion as on Mar. 31. The RBI attributed this to a rise in domestic and foreign investments, as well as gold holdings on the assets side. Liabilities rose due to revaluation accounts, notes issued, and deposits and other liabilities.

 

However, debits on the investment revaluation accounts on both rupee and foreign securities drove down the size of the RBI's contingency fund. It also had to create a provision of INR 434 billion on its foreign exchange forward contracts valuation account. Consequently, the RBI had to transfer INR 1.09 trillion to its contingecy fund from INR 448.62 billion the previous year, accounted as a provision. This increased the RBI's expenditure in FY26 and ate into the surplus transfer even with the lower size of the Contingent Risk Buffer.

 

The contingency fund is a specific provision for meeting unexpected and unforeseen contingencies, including depreciation in value of securities, risks and arising out of monetary and exchange rate policy operations. The balance in the contingency fund as of Mar. 31 was INR 5.68 trillion compared with INR 5.42 trillion a year ago.

 

The RBI faced a mark-to-market loss of INR 306 billion in FY26 on its rupee securities, which was debited from the contingency fund. In FY25, it had shown a gain on INR 168 billion on this account, reducing the provision requirements. Meanwhile, the debit from the investment revalatution account – foreign securities rose by around 95 billion on year to INR 908 billion in FY26. The change was debited from the contingency fund.

 

Total earnings from foreign sources rose 26.6% on year to INR 3.28 trillion, largely due to the income from foreign exchange operations, dwarfing the INR-1.00-trillion income from domestic sources. Interest income on rupee securities rose nearly 38% on year to INR 1.18 trillion. However, the net interest income loss from Liquidity Adjustment Facility operations widened to INR 192 billion in FY26 from INR 101 billion the previous year.

 

The central bank's holdings of domestic securities rose 45% on year to INR 22.59 trillion as on Mar. 31 as it bought INR 8.78 trillion of gilts on a net basis through open market operations. Foreign currency assets rose 8% on year to INR 52.68 trillion at end-March. The rate of earnings on these assets rose 6.4% in FY26 from 5.3% a year ago, the central bank said. Meanwhile, the balances in the RBI's currency and gold revaluation account rose to INR 21.69 trillion from INR 13.03 trillion a year ago.  End

 

US$1 = INR 95.31

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

 

Reported by Aaryan Khanna

Edited by Avishek Dutta

 

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