Mumbai: The balance sheet of the RBI increased to Rs 76.25 lakh crore, aided by nearly 33 per cent gains in foreign exchange transactions, as of March 2025, leading to a bumper Rs 2.7 lakh crore dividend to the central government, said the central bank’s annual report released on Thursday.

The keenly awaited RBI report, which was released on Thursday, said the Indian economy is poised to remain the fastest-growing major economy in 2025-26 by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth. The economy exhibited resilience during 2024-25, supported by strong macroeconomic fundamentals and proactive policy measures, amid protracted geopolitical tensions and geoeconomic fragmentation, said the RBI’s Annual Report for the Year 2024-25.

“The strength of the financial sector, reflected in improved asset quality and well-capitalised banks, further supported economic activity. Amidst multiple global headwinds, the Indian financial markets demonstrated resilience and orderly movements,” it said.

It also flagged global financial market volatility, geopolitical tensions, trade fragmentation, supply-chain disruptions and climate-induced uncertainties as factors posing downside risks to the growth outlook and also upside risks to the inflation outlook. However, factors like easing of supply-chain pressures, softening global commodity prices and higher agricultural production on above-normal south west monsoon augur well for inflation outlook, the Reserve Bank said. Shifts in tariff policies may result in sporadic episodes of volatility in financial markets, it said, adding that exports may encounter headwinds on “inward-looking policies and tariffwars”.

The trade pacts being signed and negotiated by India will help ensure that the impact is limited, the RBI said, adding that services exports and inward remittances will help ensure that the current account deficit is “eminently manageable” in the new fiscal. The RBI, which has already lowered key policy rates in two consecutive reviews, said in the annual report that there is now a “greater confidence” on durable alignment of headline inflation to the 4 per cent target over a 12-month horizon. Considering the dynamic nature of the interest rate risk, banks need to address both trading and banking book risks, especially in light of moderation in net interest margins, it recommended. Accordingly, the RBI MPC in its April meeting unanimously voted to reduce the policy repo rate by 25 bps to 6.0 per cent.