Shirish Chandra Murmu, Deputy Governor of the RBI. , Photo credit: cueapi
“The prudent accounting policy over the years has ensured that the RBI has a strong and resilient balance sheet with risk provisions in the form of realized equity and revaluation balances currently at 7.5 percent (6.50 percent at end-March 2024) and 17.4 percent (16 percent) of the balance sheet, respectively,” Murmu said.
RBI’s balance sheet size increased by ₹5,77,718.72 crore – that is 8.20 percent from ₹70,47,703.21 crore as on March 31, 2024 to ₹76,25,421.93 crore as on March 31, 2025.
Domestic assets accounted for 25.73 per cent, while foreign currency assets, gold (including gold deposits and gold held in India) and loans and advances to financial institutions outside India constituted 74.27 per cent of total assets as on March 31, 2025, against 23.31 per cent and 76.69 per cent, respectively, as on March 31, 2024, according to the RBI’s latest annual report.
Speaking at the first International Conference on Accounting Practices of Central Banks, organized by RBI along with the SEACEN (Southeast Asian Central Banks) Center in Mumbai, the Deputy Governor emphasized that the Indian central bank has a transparent, publicly disclosed and rules-based surplus distribution policy under the Economic Capital Framework (ECF).
Introduced in 2018-19, this framework is based on recommendations of an independent expert committee (headed by RBI’s former governor Bimal Jalan).
“The ECF recognizes that realized equity must cover monetary and financial stability risks, credit risks and operational risks, while revaluation balances must cover market risk. After making the required provisions, the remaining surplus will be transferred to the government,” Murmu said.
He noted that since the introduction of the ECF, RBI has consistently maintained its risk buffers at prescribed levels even in the face of unprecedented challenges such as the Covid-19 pandemic and the subsequent global monetary tightening.
“As we strive for continuous improvement and refinement, the ECF has recently been internally reviewed and the risk assessment has been made more detailed,” he said.
Emerging areas
Referring to the recent sharp rise in gold prices, which has generated a lot of attention and debate globally regarding its impact on central banks’ balance sheets, the Deputy Governor noted that the RBI is conservatively revaluing gold stocks at 90 percent of the London Bullion Market Association (LBMA) gold price.
However, gold revaluation practices vary from country to country and the impact of large gold price movements on central banks’ balance sheets and incomes needs a broader discussion.
Murmu noted that the issue of the potential impact of the central bank digital currency (CBDC) on central banks’ balance sheets has also generated a lot of international research and discussion.
Some research papers have attempted to explore how the design choices for CBDCs adopted by central banks may influence people’s behavior regarding the adoption of CBDC and the possible replacement of banknotes and/or bank deposits with CBDC. There is also global talk and debate about whether and how this could impact central banks’ balance sheet structures and the need for liquidity operations.
Published on November 14, 2025
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