RBI foreign exchange revenue is expected to rise, paying the government

The RBI is likely to earn higher revenues due to the deployment of FX reserves in FY2 compared to the previous year, suggesting the latest RBI data, as U.S. fiscal yields have been improving over the past few months.The revenue, part of foreign resource gains, will help increase central banks' dividend payments to the government, which is already expected to be higher this year due to strong commissions earned by foreign exchange operations and interest income from government securities. However, accurate prediction of transfer amounts can be difficult due to complex configuration exercises.
According to data released by the central bank last week on invisible invisible power, interest income on foreign currency assets rose 40% to $17 billion between April and December 20024 and December 2024 (i.e. the first nine months of the current fiscal year).

Analysis of RBI revenue and expenditure over the years shows that these revenues from foreign exchange deployment accounts are less than 15% of the total central bank revenue. Other major sources include revenue from foreign exchange operations to manage money market sales and purchases from which they earn commissions. It also earns interest through shares in government securities held in its books and through liquidity operations it conducts.

“We expect the RBI dividend will be supported by foreign exchange intervention due to huge sales of total sales. Other sources of income will be government security and interest income from foreign currency assets,” said Gaura Sengupta, chief economist at IDFC First Bank. “In terms of expenditure, how much supply is completed may be a key variable.”
The Reserve Bank of India may announce in late May that it will transfer its surplus funds to the government. Last year, it had paid Rs 2.1 crore, twice as much as expected.
RBI Economic Capital – As of March 28, 2025, higher aspects of tracking require maintaining financial stability, while the recommendation is 20.4-25.4%. Still, supply may be higher than last year due to the RBI's balance sheet growth. The central bank has been injecting liquidity into the banking system to achieve policy transmission after two rounds of lower interest rates. This is expected to expand its balance sheet.