In a year marked by financial turbulence and central bank losses across the developed world, the Reserve Bank of India (RBI) has emerged as a global outlier in fiscal resilience and profitability. According to comparative central bank data for FY 2024–25, the RBI not only expanded its balance sheet by 8.2% year-over-year, but also delivered a net income of USD 31.5 billion and maintained a risk buffer equivalent to 6% of its total assets—far surpassing the performance of its developed-world counterparts.
While central banks like the US Federal Reserve, European Central Bank (ECB), Bank of England (BoE), and Reserve Bank of Australia (RBA) posted substantial losses and shrank their balance sheets, the RBI’s fiscal and policy strategies have allowed it to remain not only solvent but exceptionally profitable. The US Federal Reserve incurred a loss of USD 77.5 billion, the ECB reported a negative income of USD 8.97 billion, and the BoE faced losses of USD 40.5 billion. Even the Bank of Canada and the Reserve Bank of Australia, both of which had traditionally conservative balance sheets, reported net losses. In contrast, the RBI’s robust income was underpinned by careful liquidity management, effective deployment of foreign exchange reserves, and strategic restraint in bond purchases during the pandemic.
This divergence is further illustrated by the RBI’s contingency reserves, which now stand at USD 53.6 billion, comprising 6% of its total assets—an equity cushion unmatched by the major central banks, many of which operate with negligible or even negative equity. The BoE and ECB both currently maintain risk buffers close to zero, reflecting heavy mark-to-market losses on their oversized quantitative easing portfolios. The RBI’s limited exposure to such long-duration government securities and its restrained approach to quantitative easing has insulated it from similar market volatility.
India’s policy rate of 6.00% places it in a sweet spot among major economies, with real interest rates remaining positive as headline CPI inflation has moderated to 3.2% from a post-pandemic peak of 6.8%. This effective inflation targeting contrasts with the policy dilemmas in economies such as Japan, where a 0.50% policy rate trails inflation of approximately 3.6%, resulting in deeply negative real rates. Similarly, the Fed, BoE, and RBA have seen policy rates sharply tightened in response to inflation surges, but at the cost of massive mark-to-market losses and fiscal stress.
The RBI’s ability to generate a record dividend of ₹2.11 lakh crore (approximately USD 25.5 billion) to the Indian government further highlights its fiscal strength. Unlike many of its peers that now depend on their treasuries for indemnities or capital top-ups, the RBI is returning capital to the exchequer. This surplus is not only the highest among major central banks, but is also being achieved without compromising inflation control or financial stability.
As the global monetary system recalibrates post-Covid, the RBI’s performance offers an instructive counter-model rooted in prudence, flexibility, and structural strength. In an era where many advanced economies are grappling with bloated balance sheets, asset losses, and rising debt, the Indian central bank stands out for having navigated the pandemic aftermath with both profitability and resilience.
