Latest news with #EconomicCapitalFramework
Time of India
2 days ago
- Business
- Time of India
RBI posted Rs 3.38 lakh cr income on strong foreign asset returns, forex sales
MUMBAI:RBI's income rose 23% to Rs 3.38 lakh crore in FY25, driven by gains from foreign currency assets and dollar sales in the local market. This helped the central bank transfer a record Rs 2.7 lakh crore to the Govt, up from Rs 2.1 lakh crore in FY24. RBI's balance sheet grew 8.2% to Rs 76 lakh crore in FY25 from Rs 70 lakh crore in FY24. One of the drivers of the rise in assets, was higher gold holdings, as global uncertainty boosted safe-haven demand. The rest came from a larger domestic investment portfolio, supported by OMO purchases for managing liquidity. Overall interest income rose by 12% to Rs 2.11 lakh crore, while gains from foreign exchange transactions contributed to a 47% jump in other income, which stood at Rs 1.28 lakh crore. The RBI's total income for the year increased by 23% to Rs 3.38 lakh crore, mainly driven by a 29% rise in interest earnings from overseas assets to Rs 1.33 lakh crore. However, part of the money was used by the RBI to strengthen its financial buffers. The Contingency Fund rose by 27% to Rs 5.42 lakh crore, following a Rs 44,862 crore provision to align its Available Realised Equity (ARE) with the 7.5% target under the Economic Capital Framework. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo The ARE rose nearly 25% to Rs 5.72 lakh crore, while the Asset Development Fund remained unchanged at Rs 22,975 crore. Domestic earnings, however, declined. Interest income from local investments dropped nearly 10% to Rs 77,327 crore, largely due to lower returns from rupee securities. Other income from domestic operations fell by 20% to Rs 2,143 crore. Total expenditure went up by 8% to Rs 69,714 crore, mainly due to higher costs for printing currency and employee benefits. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
2 days ago
- Business
- Time of India
29_Mum_MS_RBISURPLUS
Rbi reports increase in surplus transfer driven by foreign exchange gains in fy25 MUMBAI: Earnings from foreign exchange operations helped the Reserve Bank of India (RBI) report a 27% jump in its surplus transfer to the central govt for FY25, with revenue coming from both foreign currency assets as well as profits from the sale of dollars in the Indian markets. The surplus, also termed the available balance for transfer, rose to Rs 2.7 lakh crore in FY25 from Rs 2.1 lakh crore in FY24. Overall interest income rose by 12% to Rs 2.11 lakh crore, while gains from foreign exchange transactions contributed to a 47% jump in other income, which stood at Rs 1.28 lakh crore. The RBI's total income for the year increased by 23% to Rs 3.38 lakh crore, mainly driven by a 29% rise in interest earnings from overseas assets to Rs 1.33 lakh crore. However, part of the money was used by the RBI to strengthen its financial buffers. The Contingency Fund rose by 27% to Rs 5.42 lakh crore, following a Rs 44,862 crore provision to align its Available Realised Equity (ARE) with the 7.5% target under the Economic Capital Framework. The ARE rose nearly 25% to Rs 5.72 lakh crore, while the Asset Development Fund remained unchanged at Rs 22,975 crore. Domestic earnings, however, declined. Interest income from local investments dropped nearly 10% to Rs 77,327 crore, largely due to lower returns from rupee securities. Other income from domestic operations fell by 20% to Rs 2,143 crore. Total expenditure went up by 8% to Rs 69,714 crore, mainly due to higher costs for printing currency and employee benefits. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Indian Express
2 days ago
- Business
- Indian Express
RBI's balance sheet expands 8.2% in 2024-25 on robust foreign earnings
Driven by strong income growth, particularly on account of robust earnings from foreign sources, the Reserve Bank of India's (RBI) balance sheet expanded by 8.2 per cent to Rs 76.25 lakh crore in the year 2024-25. The RBI's balance sheet stood at Rs 70.48 lakh crore as on March 31, 2024. The balance sheet of the RBI plays a critical role in the functioning of the country's economy, largely reflecting the activities carried out by the regulator, including the issuance of currency as well as monetary policy and reserve management. During 2024-25, its income grew by 22.77 per cent to Rs 3.38 lakh crore from Rs 2.76 lakh crore in 2023-24. The expenditure increased by 7.76 per cent to Rs 69,714.02 crore in 2024-25 from Rs 64,694.33 crore as on March 31, 2024, according to the RBI's annual report. The income from foreign sources surged 38.07 per cent to 2.59 lakh crore in 2024-25 from Rs 1.87 lakh crore in 2023-24. The rate of earnings on foreign currency assets was 5.31 per cent in the year 2024-25 as compared to 4.21 per cent in the previous year. The RBI's earnings from domestic sources declined 9.80 per cent from Rs 88,101.12 crore in 2023-24 to Rs 79,470.54 crore in 2024-25, mainly due to a decrease in interest on holding of rupee securities. The interest on holding of rupee securities, including oil bonds, dipped 7.63 per cent to Rs 85,524.67 crore. In the RBI's balance sheet, the increase on the assets side was due to a rise in gold, domestic investments and foreign investments by 52.09 per cent, 14.32 per cent and 1.7 per cent, respectively. On the liabilities side, expansion was due to an increase in notes issued, revaluation accounts, and other liabilities by 6.03 per cent, 17.32 per cent and 23.31 per cent, respectively. Domestic assets constituted 25.73 per cent while foreign currency assets, gold (including gold deposit and gold held in India) and loans and advances to financial institutions outside India constituted 74.27 per cent of total assets as on March 31, 2025 as against 23.31 per cent and 76.69 per cent, respectively, as on March 31, 2024. The total gold held by the RBI was 879.58 metric tonnes as on March 31, 2025, as compared to 822.1 metric tonnes as on March 31, 2024, reflecting an increase of 57.48 metric tonnes of gold during the year. The RBI's 'other liabilities' increased by 23.31 per cent from Rs 2.61 lakh crore as on March 31, 2024 to Rs 3.21 lakh crore as on March 31, 2025, primarily due to an increase in surplus payable to the Central Government. The RBI transferred Rs 2.69 lakh crore worth of surplus to the government for the year 2024-25, compared to Rs 2.11 lakh crore paid during 2023-24. As per the revised Economic Capital Framework (ECF), Contingent Risk Buffer (CRB) needs to be maintained in the range of 4.5-7.5 per cent of the size of the balance sheet. Last week, the RBI's central board approved that CRB may be maintained at 7.5 per cent of the size of the balance sheet of the Reserve Bank for the year 2024-25. Accordingly, a provision of Rs 44,861.7 crore was made and transferred to the contingency fund (CF) during 2024-25. The contingency fund is a specific provision meant for meeting unexpected and unforeseen contingencies, including depreciation in value of securities, risks arising out of monetary/exchange rate policy operations, systemic risks and any risk arising on account of special responsibilities enjoined upon the Reserve Bank. Table Income 3,38,308.09 2,75,572.32 22.77 Surplus transfer to government
Time of India
2 days ago
- Business
- Time of India
RBI reports increase in surplus transfer driven by foreign exchange gains in FY25
MUMBAI: Earnings from foreign exchange operations helped the Reserve Bank of India ( RBI ) report a 27% jump in its surplus transfer to the central govt for FY25, with revenue coming from both foreign currency assets as well as profits from the sale of dollars in the Indian markets. The surplus, also termed the available balance for transfer, rose to Rs 2.7 lakh crore in FY25 from Rs 2.1 lakh crore in FY24. Overall interest income rose by 12% to Rs 2.11 lakh crore, while gains from foreign exchange transactions contributed to a 47% jump in other income, which stood at Rs 1.28 lakh crore. The RBI's total income for the year increased by 23% to Rs 3.38 lakh crore, mainly driven by a 29% rise in interest earnings from overseas assets to Rs 1.33 lakh crore. However, part of the money was used by the RBI to strengthen its financial buffers. The Contingency Fund rose by 27% to Rs 5.42 lakh crore, following a Rs 44,862 crore provision to align its Available Realised Equity (ARE) with the 7.5% target under the Economic Capital Framework. The ARE rose nearly 25% to Rs 5.72 lakh crore, while the Asset Development Fund remained unchanged at Rs 22,975 crore. Domestic earnings, however, declined. Interest income from local investments dropped nearly 10% to Rs 77,327 crore, largely due to lower returns from rupee securities. Other income from domestic operations fell by 20% to Rs 2,143 crore. Total expenditure went up by 8% to Rs 69,714 crore, mainly due to higher costs for printing currency and employee benefits. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
2 days ago
- Business
- Time of India
Once weighed down by bad loans, public sector banks drive India's banking profits to highest ever in history
Government-owned banks demonstrated remarkable growth with a 26% increase in profits to Rs 1.83 lakh crore. (AI image) Big turnaround story! Public sector banks led India's banking sector to record-breaking profits in FY25, with industry earnings rising nearly 14-fold over a decade to Rs 3.71 lakh crore, driven by lending income, treasury gains and reduced provisions for non-performing assets. Government-owned banks demonstrated remarkable growth with a 26% increase in profits to Rs 1.83 lakh crore, closing in on private banks, which recorded a modest 7% growth to Rs 1.87 lakh crore, according to an ET analysis. State Bank of India emerged as the most profitable bank with net earnings of Rs 70,900 crore, with HDFC Bank following at Rs 67,347 crore, and ICICI Bank achieving Rs 47,227 crore in FY25. The overall private sector bank profits were affected by significant declines in earnings at IndusInd Bank and IDFC First Bank. The remarkable financial performance follows the cleanup initiative that began in 2015 with the asset quality review (AQR) under former central bank governor Raghuram Rajan. This led PSU banks to record substantial losses over three successive years, with bad loans exceeding 8% of advances in FY16. Sharp Post-Covid Rebound To support PSU banks' growth, the government provided capital injection of Rs 3.15 lakh crore since the 2015 AQR, according to the recently published Economic Capital Framework report. Motilal Oswal Finance Services' banking report has said: "Banks are prioritising asset quality over growth, with stricter credit filters, higher CIBIL score thresholds, and conservative underwriting—especially in retail segments… PSU banks' disbursements remain modest while private players have gained share." In fiscal year 2016, commercial banks collectively posted a net profit of Rs 24,854 crore, primarily attributed to the strong performance of private sector banks. Lenders then initiated a comprehensive balance sheet restructuring, prompted by regulatory guidance and supported by updated insolvency legislation designed to swiftly recover substantial funds locked in debt-laden assets. "The key driver of the impressive rise in profits is the stable credit growth in FY25 on top of the good growth in FY24," said VK Vijayakumar, chief investment strategist, Geojit Investments. The aggregate net profit of all commercial banks stood at Rs 3.19 lakh crore in the previous year. "A major concern at the beginning of the year was deposits lagging credit growth. But as the year progressed, the deposit growth converged with credit growth," he added. The AQR implementation resulted in enhanced recognition of non-performing loans and increased provisions. The subsequent introduction of the Insolvency and Bankruptcy Code strengthened banks' recovery mechanisms and negotiating position with defaulters. According to IBBI statistics, creditors have recovered approximately Rs 3.9 lakh crore across 1,194 cases through March 2025. Regarding stressed assets, Subha Sri Narayanan, director, Crisil Ratings, says, "Gross non-performing assets (NPAs) have bottomed at 2.4% as of March 31, 2025, and are seen rangebound at 2.4-2.6% by March 2026. While corporate NPAs would remain low on strengthened risk management of banks, and robust balance sheets of corporates." Discussing FY26 net interest margin (NIM) prospects, Vishal Narnolia, analyst, ICICI Direct, noted, "In the first half, NIMs are expected to decline around 15 bps as there is a strong probability of policy rate cut which the banks will have pass to EBLR-linked borrowers." He indicated that deposit repricing in the second half should support margin recovery, with overall margins likely decreasing by approximately 10 bps in FY26. Most banks maintain NIMs—the gap between interest income and expense—between 3% and 4%. Vijayakumar of Geojit confirms the banking sector's positive outlook. He cautioned that "However, there are some concerns arising out of rising delinquencies in unsecured loans, credit cards and stress in the microfinance segment which can moderate profit growth in FY26.' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
