The RBI’s strategic initiatives and financial performance reflect its commitment to fostering a robust economic environment and promoting the global integration of the Indian rupee
The Reserve Bank of India (RBI) has taken a significant step towards internationalising the Indian rupee by allowing the opening of rupee accounts outside India by persons resident outside India (PROIs).
This move is part of the RBI’s strategic plan for the fiscal year 2024-25, aimed at enhancing the global presence of the Indian currency and simplifying norms for non-residents.
In its annual report released on May 30, 2024, the RBI outlined its comprehensive strategy, which includes the liberalisation of the external commercial borrowing (ECB) framework and the launch of the SPECTRA project. SPECTRA, a software platform for ECBs and trade credits reporting and approval, is set to go live in its first phase.
On the financial front, the RBI reported a remarkable 141 per cent increase in its net income for the financial year 2024 (FY24), driven primarily by a significant reduction in expenditures, especially lower provisions.
The central bank emphasised the importance of aligning the Foreign Exchange Management Act (FEMA) operating framework with the evolving macroeconomic environment. “Rationalisation of various guidelines will be of primary focus,” the RBI stated. This includes allowing INR lending by Indian banks to PROIs and facilitating foreign direct investment (FDI) and portfolio investment through special non-resident rupee (SNRR) and special rupee vostro accounts (SRVA).
Additionally, the RBI plans to streamline the Liberalised Remittance Scheme (LRS) and review the International Financial Services Centre (IFSC) regulations under FEMA. These measures aim to support the settlement of bilateral trade in local currencies, further promoting the international use of the Indian rupee.
On the financial front, the RBI reported a remarkable 141 per cent increase in its net income for the financial year 2024 (FY24), driven primarily by a significant reduction in expenditures, especially lower provisions.
The net interest income surged to ₹2.1 trillion by the end of March 2024, up from ₹87,420 crore the previous year. This substantial rise in income allowed the RBI to announce a record dividend payout of ₹2.1 trillion to the government for FY24, surpassing both the government’s budget estimate and analysts’ expectations of ₹1 trillion. This payout is 141 per cent higher than the ₹87,416 crore dividend distributed in FY23.
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