Mumbai: The Reserve Bank of India’s (RBI) balance sheet expanded 20.6% in FY26 on the back of valuation gains from higher gold prices and rupee depreciation, its annual report showed on Friday.
RBI’s balance sheet rose by ₹15.7 trillion to ₹91.9 trillion as of 31 March. As a share of GDP, the balance sheet increased to 26.4% from 23.7% a year earlier.
The annual report showed that the increase on the assets side of the balance sheet was due to a rise in domestic investments, gold and foreign investments by 44.9%, 63.8% and 7.9%, respectively. On the liabilities side, revaluation accounts, notes issued, and deposits increased by 63.4%, 11.8%, and 11.6%, respectively.
Last week, the central bank announced the transfer of a record ₹2.87 trillion in FY26, higher than last year’s ₹2.68 trillion.
The central board of RBI also decided to transfer ₹1.09 trillion towards RBI’s Contingent Risk Buffer (CRB), higher than ₹44,862 crore in FY25. However, the CRB as a share of the balance sheet declined to 6.5% from 7.5% last year. The Economic Capital Framework (ECF) allows RBI to maintain a CRB of 4.5-7.5% of the balance sheet size.
“Majority of the expansion is due to valuation gains on foreign currency reserves and gold reserves,” said Gaura Sengupta, chief economist, IDFC First Bank. “Valuation gain on foreign currency reserves was due to sharp depreciation in the. Valuation gains on gold was due to a nearly 50% jump in gold prices.”
Sengupta added that liquidity infusion through RBI’s open market purchases of government securities worth ₹8.8 trillion was the second factor behind the balance sheet expansion.
As of 15 May, total reserves were at $688.9 billion, an increase of $3 billion over the past year, according to latest available data released on 22 May. While a majority of this—79%—are in foreign currency assets, 17% of the reserves are in gold. The share of gold in total reserves has increased over the years. A year ago, gold accounted for 12% of reserves.