RBI’s Income Sources and Record ₹2.69 Lakh Crore Surplus
Why in the news
RBI’s net income climbed 27% in FY25, helped by higher global rates and profits on dollar sales. This allowed a record surplus transfer of ₹2.69 lakh crore to the Centre, easing the fiscal deficit.
Key facts
- Net income growth in FY25: 27%.
- Surplus paid to the government: ₹2.69 lakh crore, a record.
- Profit is not RBI’s primary mandate; its core job is monetary stability.
How RBI earns
| Source | How it works |
|---|---|
| Foreign investments | Interest on forex reserves held in US Treasury bonds, Euro bonds and similar assets |
| Currency market operations | Buys dollars on heavy inflows such as FPI money, sells them when the rupee weakens; gains from timing and pricing |
| Government securities | Coupon interest on large holdings of Indian G-Secs |
| Repo lending | Short-term loans to banks at the repo rate under the Liquidity Adjustment Facility; repo was about 6.5% in FY 2023-24 |
| Seigniorage | Profit from issuing currency: face value minus production cost |
Seigniorage
- Illustration: a ₹500 note costing ₹3 to print yields ₹497 profit.
- It is direct income for RBI and the government, particularly when currency demand is high.
- Treated as non-tax revenue for the sovereign.
Purpose of forex holdings
- Stabilising the rupee and ensuring forex liquidity.
Exam angle
- Record transfer: ₹2.69 lakh crore in FY25.
- Seigniorage formula: face value – cost of printing.
- RBI buys dollars on excess inflows and sells them during rupee depreciation.