The Reserve Bank of India released its Annual Report for 2024-25, a statutory report of its Central Board of Directors. The Report covers the working and functions of the Reserve Bank of India for the period April 2024 – March 2025.
The Reserve Bank of India (RBI) has unveiled its Annual Report for the fiscal year 2024–25, highlighting significant strides in monetary policy, financial stability, and digital innovation. Here’s an overview of the key developments:
- Robust Financial Performance
In FY25, the RBI’s balance sheet expanded by 8.2% to ₹76.25 lakh crore. This growth facilitated a record transfer of ₹2.69 lakh crore to the central government, aiding in fiscal consolidation. Factors contributing to this performance include higher global interest rates and strategic foreign exchange interventions, which bolstered the RBI’s income by 27% .
- Inflation Management and Economic Outlook
The RBI’s proactive monetary policy successfully moderated inflation, bringing it below the 4% target in February and March 2025. This achievement provides the RBI with greater flexibility to support economic growth in FY26. The central bank projects a positive economic outlook, driven by strong domestic consumption and increased capital spending .
- Currency Management Reforms
In a significant move, the RBI announced the cessation of printing ₹2, ₹5, and ₹2,000 denomination notes. By March 2025, 98.2% of ₹2,000 notes had been returned to banks, signaling their near-total withdrawal from circulation. The ₹500 note has become the dominant currency, comprising 40.9% of all notes and 86% of the value in circulation. Additionally, the RBI is promoting sustainability by recycling old notes into furniture material and advancing its ‘Sa-Mudra’ project to digitize and automate currency management .
- Expansion of Digital Rupee (e₹)
The RBI has intensified efforts to expand the scope of its Central Bank Digital Currency (CBDC). The pilot programs for both retail (e₹-R) and wholesale (e₹-W) digital rupees are being expanded to incorporate various use cases, new designs, and more participants. The inclusion of offline capabilities and programmability aims to enhance the digital currency’s accessibility and functionality .
- Strengthening Financial Sector Regulations
The RBI is undertaking comprehensive regulatory reforms to enhance the resilience of financial intermediaries. These include adopting the Expected Credit Loss (ECL) model for asset classification, reviewing loan rate frameworks, and harmonizing prudential guidelines for project finance. The central bank is also focusing on expanding the reach of CBDC and enhancing financial inclusion through initiatives like the National Strategy for Financial Inclusion (NSFI) for 2025–30 .
- Advancements in Payment Systems
Digital payments have continued to gain momentum, with the Unified Payments Interface (UPI) surpassing 13 billion transactions in a single month in March 2024. The number of Point of Sale (PoS) terminals increased by 14.3% to 89 lakh, and the number of Bharat QR codes deployed increased by 16.1% to 62.5 lakh. The RBI is also working with the National Payments Corporation of India (NPCI) to expand UPI’s reach to 20 countries by 2028–29 .
- Addressing Financial Sector Frauds
The RBI has noted an increase in banking frauds, with the number of instances rising to 36,075 in FY24, up from 13,564 in the previous year. However, the amount defrauded decreased from ₹26,127 crore in FY23 to ₹13,930 crore in FY24. The RBI is implementing measures to enhance the security and integrity of the financial system .
Conclusion
The RBI’s Annual Report for 2024–25 underscores its commitment to fostering economic stability, advancing digital innovation, and strengthening the financial sector. Through strategic policy measures and regulatory reforms, the central bank aims to navigate the challenges of the evolving economic landscape while ensuring sustainable growth and financial inclusion.
