Key Highlights
- RBI’s total income rose to a record ₹4.28 lakh crore in FY26.
- Dividend transfer to the Centre reached an all-time high of ₹2.87 lakh crore.
- RBI spent approximately ₹1.41 lakh crore on expenses and provisions.
- Foreign exchange transactions generated ₹1.69 lakh crore, the largest source of income.
- RBI sold $195 billion worth of foreign currency during FY26.
- Interest income from government securities stood at ₹1.18 lakh crore.
- Interest earned on foreign securities increased to ₹1.08 lakh crore.
- Interest on foreign deposits contributed ₹27,407 crore.
- Net provisions surged to ₹1.09 lakh crore due to market risks and forex-related exposures.
- Currency printing expenses were ₹4,875 crore.
- Employee costs rose 11% to ₹10,136 crore.
New Delhi: The Reserve Bank of India (RBI) reported a record total income of ₹4.28 lakh crore in FY 2025-26, leading to an unprecedented dividend transfer of ₹2.87 lakh crore to the central government. The surge in earnings was largely driven by foreign exchange operations undertaken to support the rupee amid global economic uncertainties.
The RBI’s total income increased by 26% compared to the previous financial year. Out of the total earnings, the central bank spent around ₹1.41 lakh crore on various operational and provisioning expenses.
Rupee Defence Boosts Earnings
During FY26, global geopolitical tensions, tariff disputes, capital outflows and higher commodity imports put pressure on the Indian rupee, which depreciated nearly 10% against the US dollar.
To stabilize the currency, the RBI sold previously accumulated foreign exchange reserves. Since many of these reserves were purchased at lower exchange rates in earlier years, selling them at higher rates generated substantial gains.
As a result, the RBI recorded ₹1.69 lakh crore in exchange gains, up 52% from the previous year, making foreign exchange operations the biggest contributor to its earnings.
Liquidity Operations Added More Income
Selling dollars absorbs rupees from the banking system, potentially creating liquidity shortages. To offset this, the RBI purchased nearly ₹9 lakh crore worth of government bonds, injecting liquidity into the financial system.
These bond holdings generated ₹1.18 lakh crore in interest income during the year.
The RBI also earned ₹1.08 lakh crore from foreign securities held as part of its forex reserves, while foreign deposits added another ₹27,407 crore.
Major Expenses Came from Risk Provisions
The largest expenditure item was provisioning, which totaled ₹1.09 lakh crore.
These provisions were made to account for:
- Decline in value of domestic and foreign securities.
- Losses linked to forward contracts used for rupee management.
- Market risks arising from higher global bond yields.
The provision burden was partially reduced after the RBI lowered its Contingent Risk Buffer from 7.5% to 6.5% of the balance sheet.
Why It Matters
The RBI’s record earnings have provided significant fiscal support to the government through the ₹2.87 lakh crore dividend transfer. However, much of the income was generated from extraordinary foreign exchange market interventions and may not be repeated at the same scale in future years.
