New Delhi: The Reserve Bank of India (RBI) released its Annual Report for the fiscal year 2024-25, offering a comprehensive overview of its operations, financial performance, and the state of the Indian economy. This statutory report, published on May 29, 2025, details the central bank’s activities from April 2024 to March 2025, highlighting key economic indicators, monetary policy developments, and transformative initiatives in digital payments.
RBI’s Financial Performance: Balance Sheet Growth and Surplus
The RBI’s balance sheet for FY25 expanded significantly, growing by 8.20% year-on-year to ₹76.25 lakh crore, up from ₹70.47 lakh crore in FY24. This growth was driven by a substantial increase in assets, particularly in gold (52.09%), domestic investments (14.32%), and foreign investments (1.70%). Domestic assets accounted for 25.73% of the total, while foreign currency assets, gold (including gold deposits and gold held in India), and loans to financial institutions outside India comprised 74.27% of the total assets as of March 31, 2025.
On the liabilities side, the expansion was fueled by a 6.03% increase in notes issued, a 17.32% rise in revaluation accounts, and a 23.31% increase in other liabilities. The financial results for FY25 also showed a robust increase in income and expenditure. Income for the year rose by 22.77%, while expenditure increased by 7.76%. This led to an overall surplus of ₹2.68 lakh crore, a 27.37% increase from ₹2.10 lakh crore in the previous year. After allocating ₹44,861.70 crore to the Contingency Fund (CF), the remaining surplus of ₹2.69 lakh crore was transferred as a dividend to the Central Government, as announced on May 23, 2025. Notably, no provision was made for the Asset Development Fund (ADF) in FY25.
Economic Outlook: Robust Growth Amid Global Challenges
The RBI’s Annual Report for 2023-24, referenced in the 2024-25 report, projected a real GDP growth of 7.0% for FY25, with risks evenly balanced. This follows a strong performance in FY24, where India’s economy grew at 7.6%, up from 7.0% in the previous year, marking the third consecutive year of growth at or above 7%. For FY25-26, the RBI projects a slightly lower real GDP growth of 6.5%, signaling cautious optimism.
The report attributes India’s robust growth to solid investment demand, supported by healthy balance sheets of banks and corporates, the government’s focus on capital expenditure, and prudent monetary, regulatory, and fiscal policies. Despite global challenges, including geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements, and erratic weather patterns, India’s economy is well-positioned to maintain its growth trajectory over the next decade. The report emphasizes macroeconomic and financial stability as key enablers of this sustained growth.
Inflation and Consumption Trends
Headline inflation is expected to ease and gradually align with the RBI’s target in FY25-26. As inflation cools, the report predicts a boost in consumption demand, particularly in rural areas, which could further drive economic growth. The RBI also highlighted that India’s external sector strength, bolstered by substantial foreign exchange reserves, will shield domestic economic activity from global spillovers. However, the report cautions that geopolitical tensions, commodity price volatility, and climate shocks pose upside risks to inflation and downside risks to growth.
Household Savings and Debt Dynamics
The RBI report notes a rise in net household savings, which increased to 5.1% of gross national disposable income (GNDI) in FY24. GNDI is calculated as Net National Product at market prices (Gross National Product minus depreciation) plus other current transfers from the rest of the world. This increase in savings reflects growing financial discipline among households.
India’s external debt-to-GDP ratio stood at 19.1% in December 2024, the lowest among emerging markets, underscoring the country’s prudent fiscal management. Additionally, the currency deposit ratio declined to 15.4% by March 2025, driven by the rapid growth of digital transactions, which signals a shift toward a more digital economy.
Central Bank Digital Currency (CBDC): A Leap Forward
The RBI’s Central Bank Digital Currency (CBDC), or e-rupee, has seen significant adoption, with its value reaching ₹1,016 crore by the end of March 2025. The e-rupee, a digital form of India’s physical currency issued by the RBI, is gaining traction as the central bank explores its potential for cross-border payments. The RBI plans to expand CBDC pilots for both retail and wholesale transactions, aiming to enhance its scalability and utility in domestic and international markets.
UPI Innovations: Expanding the Digital Payment Ecosystem
The RBI’s Annual Report 2024-25 highlights transformative initiatives in India’s Unified Payments Interface (UPI), reinforcing its position as a global leader in digital payments. Key developments include:
UPI Circle and Delegated Payments
Introduced in August 2024, the ‘UPI Circle’ or ‘Delegated Payments’ feature allows a primary UPI user to authorize another person to conduct transactions using their account without requiring a UPI-linked bank account for the secondary user. This innovation is expected to deepen digital payment adoption, particularly among families, domestic helpers, and small merchants, by enabling seamless transactions without the need for new accounts.
Increased UPI Limits
To accelerate transaction capacity, the RBI raised UPI limits across various categories:
- UPI123Pay per-transaction limit increased from ₹5,000 to ₹10,000, catering to feature phone users.
- UPI Lite wallet limits were raised from ₹500 per transaction and ₹2,000 overall to ₹1,000 per transaction and ₹5,000 overall, facilitating micro-transactions.
- The limit for tax payments via UPI was increased from ₹1 lakh to ₹5 lakh per transaction, encouraging high-value digital payments.
Prepaid Payment Instruments (PPIs) and Third-Party Apps
The RBI has enabled PPI holders to use third-party UPI apps, breaking the previous restriction of using only issuer-specific apps. This change enhances accessibility for digital wallet users, allowing seamless integration with the broader UPI ecosystem.
Auto-Replenishment for UPI Lite and Transport Wallets
The RBI introduced an auto-replenishment facility for UPI Lite, FASTag, and National Common Mobility Card (NCMC) under the e-mandate framework. This feature automatically tops up balances when they fall below a user-set threshold, improving convenience for recurring micropayments and transport-related transactions.
Interoperable Cash Deposits
Since June 2024, the RBI has enabled interoperable cash deposits via UPI at bank cash deposit machines (CDMs). This initiative simplifies branch-free cash services, making cash management more accessible and digitally integrated.
Credit Access for Small Finance Banks
The RBI extended credit lines on UPI to Small Finance Banks (SFBs), leveraging their high-tech, low-cost model to reach underserved and ‘new-to-credit’ customers. These pre-sanctioned, low-ticket, short-tenure credit lines enhance last-mile credit availability, promoting financial inclusion.
Global Expansion of UPI and RuPay
Under its Payments Vision 2025, the RBI is expanding the global reach of UPI and RuPay cards. UPI apps are now accepted via QR codes in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the UAE, offering convenience to Indian tourists and NRIs. The RBI has also approved UPI-like infrastructure deployment in Namibia, Peru, Trinidad and Tobago, and Jamaica, with RuPay acceptance active in multiple countries.
Challenges and Future Outlook
The RBI emphasized that India’s economy must navigate challenges posed by the rapid adoption of artificial intelligence and machine learning (AI/ML) technologies and recurrent climate shocks. These factors could impact economic stability and require adaptive policy measures. The report underscores the importance of continued innovation in digital payments, prudent monetary policies, and robust reserve management to sustain India’s growth momentum.
Conclusion
The RBI’s Annual Report for 2024-25 paints an optimistic picture of India’s economic trajectory, underpinned by strong growth, low external debt, and innovative digital payment solutions. With a projected GDP growth of 6.5% for FY 25-26, a robust balance sheet, and transformative UPI initiatives, the RBI is steering India toward greater financial inclusion and global prominence in digital finance. As the central bank continues to expand the e-rupee and UPI’s global footprint, India is well-positioned to maintain its status as the fastest-growing major economy while addressing global and technological challenges.
Frequently Asked Questions (FAQs)
1.What is the key highlight of the RBI’s balance sheet for FY25?
The RBI’s balance sheet for FY25 grew by 8.20% year-on-year to ₹76.25 lakh crore, driven by a 52.09% increase in gold, 14.32% rise in domestic investments, and 1.70% growth in foreign investments. Income increased by 22.77%, expenditure by 7.76%, resulting in a surplus of ₹2.68 lakh crore, with ₹2.69 lakh crore transferred as a dividend to the Central Government.
2.What are the RBI’s GDP growth projections for FY25 and FY25-26?
The RBI projected a real GDP growth of 7.0% for FY25, with risks evenly balanced, following a 7.6% growth in FY24. For FY25-26, the RBI forecasts a slightly lower growth rate of 6.5%, supported by strong investment demand and prudent monetary policies.
3.How has the Central Bank Digital Currency (CBDC) progressed in FY25?
The e-rupee, India’s CBDC, reached a value of ₹1,016 crore by March 2025. The RBI is expanding pilots for retail and wholesale transactions and exploring cross-border payment applications to enhance its scalability and global utility.
4.What are the new UPI initiatives introduced in the RBI Annual Report 2024-25?
The RBI introduced ‘UPI Circle’ for delegated payments, increased UPI transaction limits (e.g., UPI123Pay to ₹10,000, UPI Lite to ₹1,000 per transaction), enabled PPI holders to use third-party UPI apps, introduced auto-replenishment for UPI Lite and transport wallets, and enabled interoperable cash deposits via UPI at cash deposit machines.
5.How is the RBI expanding UPI and RuPay globally?
Under Payments Vision 2025, UPI apps are accepted via QR codes in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the UAE. The RBI has approved UPI-like infrastructure in Namibia, Peru, Trinidad and Tobago, and Jamaica, with RuPay cards gaining acceptance in multiple countries to support Indian tourists and NRIs.
