The Reserve Bank of India (RBI) expanded its balance sheet by 8.2% in FY25, reaching ₹76.25 lakh crore, up from ₹70.48 lakh crore the previous year. This steady growth underscores the central bank’s cautious yet deliberate strategy in navigating global financial uncertainty and domestic economic shifts.
Among the highlights, gold emerged as the most notable performer. The central bank boosted its gold reserves by 57.48 metric tonnes, taking the total from 822.1 metric tonnes to 879.58 metric tonnes. This increase reflects more than a preference for precious metals—it’s a calculated move amid volatile currency markets.
The valuation of gold on the RBI’s books surged by 57.12%, rising from ₹2.75 lakh crore to ₹4.32 lakh crore. This was driven by the purchase of 54.13 tonnes of additional gold and a rally in global prices, further magnified by the weakening of the Indian rupee against the US dollar.
Gold, often viewed as a haven asset, plays a dual role in the RBI’s strategy: a stabilizing hedge and a vital component of the reserves. The RBI now holds 311.38 tonnes in its Issue Department, which supports currency issuance, and 568.2 tonnes in the Banking Department, indicating a conscious move to bolster its core asset base.
Asset-side expansion came not just from gold. Domestic investments climbed by 14.32%, while foreign investments saw a marginal rise of 1.7%. These shifts suggest the RBI is gently reducing its reliance on foreign assets—now accounting for 74.27% of total assets, down from 76.69%—and leaning more on domestic holdings, which grew to 25.73% from 23.31%.
This asset rebalancing hints at a cautious stance on global markets, which continue to be shaped by geopolitical tensions and an unpredictable dollar. At the same time, it showcases confidence in India’s internal economic resilience.
On the liabilities side, there was a 6.03% rise in currency in circulation, indicating continued demand for cash, even as digital transactions gain ground. Revaluation accounts swelled by 17.32%, mainly due to the higher value of gold. Other liabilities grew by 23.31%, pointing to the RBI’s broader market operations and possible financial system interventions.
Notably, the RBI transferred ₹44,861.7 crore to its Contingency Fund—its financial shock absorber—while opting not to allocate funds to the Asset Development Fund this year. This reflects a conservative approach, focused more on maintaining resilience than on infrastructure expansion.
The exact surplus transferred to the government hasn’t been disclosed in the accounts, but the RBI’s prudent financial management suggests that it continues to provide a steady stream of support to the exchequer.
So, what does this mean for India? The RBI’s growing gold reserves and strategic diversification send a clear message: the central bank is preparing for economic turbulence. Whether it’s currency swings, inflation threats, or geopolitical upheavals, India’s monetary guardian is reinforcing its defenses while keeping its options open.
The question now is whether this gold-centric strategy signals concern about global instability—or simply a long-term bet on a more secure reserve mix. Either way, it’s a reminder that in the world of central banking, glittering assets like gold still hold their shine.