Shirish Chandra Murmu, RBI Deputy Governor.
| Photo Credit:
cueapi
With an economic capital of about 25 per cent of balance sheet, the RBI is in a formidable position to effectively fulfil its public policy mandates while ensuring monetary and financial stability, according to Shirish Chandra Murmu, Deputy Governor.
“The prudent accounting policies over the years have ensured that the RBI has a strong and resilient balance sheet with risk provisions in the form of Realised Equity and Revaluation Balances, currently at 7.5 per cent (6.50 per cent as at March-end 2024) and 17.4 per cent (16 per cent) of the balance sheet, respectively,” Murmu said.
The size of RBI’s balance sheet increased by ₹5,77,718.72 crore – that is 8.20 per cent from ₹70,47,703.21 crore as on March 31, 2024 to ₹76,25,421.93 crore as on March 31, 2025.
Domestic assets constituted 25.73 per cent while foreign currency assets, gold (including gold deposit 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 as against 23.31 per cent and 76.69 per cent, respectively, as on March 31, 2024, per RBI’s latest annual report.
Speaking at the first International Conference on Central Bank Accounting Practices organised by RBI jointly with the SEACEN (South East Asian Central Banks) Centre in Mumbai, the Deputy Governor emphasised that the Indian central bank has a transparent, publicly disclosed and rule-based surplus distribution policy under the Economic Capital Framework (ECF).
This framework, introduced in 2018-19, is based on recommendations of an independent Expert Committee (headed by RBI’s former Governor Bimal Jalan).
“The ECF recognises that realised equity should cover the monetary and financial stability risks, credit, and operational risks while the revaluation balances should cover the market risk. After making the required provisions, the remaining surplus is transferred to Government,” Murmu said.
He noted that since the introduction of the ECF, RBI has consistently maintained its risk buffers at the 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 was recently reviewed internally, and risk assessment has been made more granular,” he said.
Emerging areas
Referring to the recent sharp rise in gold prices, which has garnered a lot of attention and discussions globally with respect to its impact on the central bank balance sheets, the Deputy Governor observed that RBI conservatively revalues the gold holdings at 90 per cent of the London Bullion Market Association (LBMA) gold price.
However, gold revaluation practices vary across countries and the impact of high movement in gold prices on central bank balance sheets and income needs wider discussion.
Murmu noted that the issue of potential impact of Central Bank Digital Currency (CBDC) on central bank balance sheets has also been attracting lot of international research and discussions.
Some research papers have tried to explore how the design choices for CBDCs adopted by central banks may shape people’s behaviour with respect to adoption of CBDC and potential substitution of banknotes and/or bank deposits with CBDC. It is also being discussed and debated globally whether and how this may impact central bank balance sheet structures and the need for liquidity operations.
Published on November 14, 2025
