Higher interest earnings from both domestic and foreign securities, coupled with sizeable foreign exchange gains, boosted the RBI’s income during the year

The Reserve Bank of India’s (RBI) balance sheet expanded sharply in FY26, crossing ₹91.97 lakh crore and registering a growth of 20.6 per cent over the previous year. The expansion was driven largely by a surge in the value of the central bank’s gold holdings and a sharp rise in domestic investments. At the same time, higher interest earnings from both domestic and foreign securities, coupled with sizeable foreign exchange gains, boosted the RBI’s income during the year. The transfer to contingency buffer as a share of the balance sheet declined from 7.5 per cent to 6.5 per cent.

Gold revaluation

The RBI’s total assets and liabilities rose to ₹91.97 lakh crore in FY26 from ₹76.25 lakh crore in FY25. A key factor behind this increase was the dramatic rise in the value of its gold assets, which were valued at ₹10.94 lakh crore at the end of FY26, up 63.8 per cent from ₹6.68 lakh crore a year earlier. The increase reflects the sharp appreciation in global gold prices since addition of gold to RBI’s reserves was limited to 0.94 metric tonnes in FY26.

Another major driver was the expansion of domestic investments. Domestic investments held by the RBI rose 44.9 per cent year-on-year (y-o-y) to ₹22.59 lakh crore in FY26 from ₹15.59 lakh crore in FY25. This was due to open market operations amounting to ₹8.8 lakh crore done by the RBI last fiscal year. Meanwhile, foreign investments increased at a slower pace of 7.9 per cent, rising to ₹52.68 lakh crore from ₹48.84 lakh crore.

The central bank’s contingency fund (CF) balance increased to ₹5.68 lakh crore as of March 31, 2026, from ₹5.42 lakh crore a year earlier. The RBI report states that “as on March 31, 2026, amounts of ₹90,833.07 crore, ₹30,603.99 crore and ₹43,403.23 crore were charged to CF on account of debit balances in Investment Revaluation Account (IRA), Foreign Securities, Investment Revaluation Account (IRA) and Rupee Securities and Foreign Exchange Forward Contracts Valuation Account (FCVA), respectively. This was due to hardening of yields across the yield curve in major jurisdictions. The charge to CF is reversed on the first working day of the following accounting year. Further, an amount of ₹1,09,379.64 crore was also provided towards CF to maintain the Available Realised Equity at the level of 6.5 per cent of the size of the balance sheet.”

Forex gains

The RBI’s income received a significant boost from rising interest earnings. Interest income from holdings of rupee-denominated securities climbed 37.7 per cent to ₹1.18 lakh crore in FY26 from ₹0.85 lakh crore in FY25. Interest income from foreign securities also increased, rising 11 per cent to ₹1.08 lakh crore from ₹0.97 lakh crore. Elevated US bond yields improved returns on the RBI’s foreign securities portfolio, supporting growth in earnings from overseas assets.

Foreign exchange operations provided another major source of income. With the RBI net selling foreign currency amounting to $53.13 billion in FY26, exchange gains from foreign exchange transactions rose to ₹1.69 lakh crore in FY26, up from ₹1.11 lakh crore in FY25.

Published on May 29, 2026