Context:
Reserve Bank of India (RBI) Annual Report for 2024-25 Released
Key Highlights of the RBI Annual Report (2024-25):
- Increase in RBI Assets – RBI’s total assets saw growth due to:
- Higher gold reserves
- Increased domestic and foreign investments
- Financial Performance –
- Income growth: Rose by 22.77% compared to the previous year.
- Expenditure increase: Went up by 7.76%.
- Household Savings – Net household savings climbed to 5.1% of Gross National Disposable Income (GNDI) in FY24.
- GNDI Formula: Net National Product (NNP) at market prices = Gross National Product (GNP) – Depreciation
- Other current transfers received from the rest of the world are included.
- Central Bank Digital Currency (CBDC) – CBDC or e-Rupee surged to ₹1,016 crore by March 2025.
- RBI Initiatives: Exploring pilot programs for cross-border payments; Expanding pilots for both retail and wholesale transactions.
- CBDC Definition: A digital version of India’s physical currency issued by RBI.
- External Debt & Economic Strength – India’s external debt to GDP ratio dropped to 19.1% (Dec 2024), making it the lowest among emerging markets.
- India remains the fastest-growing economy, with RBI projecting real GDP growth at 6.5% for FY 2025-26.
- Inflation Trends – Headline inflation is expected to gradually decline, moving closer to the RBI’s target range in FY 2025-26.
- Digital Transactions & Currency Deposit Ratio – The currency deposit ratio declined to 15.4% (March 2025).
- Reason: A sharp increase in digital transactions, reducing reliance on cash deposits.
Source: RBI
Previous Year Question
Which one of the following statements correctly describes the meaning of legal tender money?
[UPSC Civil Services Exam – 2017 Prelims]
(a) The money which is tendered in courts of law to defray the fee of legal cases.
(b) The money which a creditor is under compulsion to accept in settlement of his claims.
(c) The bank money in the form of cheques, drafts, bills of exchange, etc.
(d) The metallic money in circulation in a country.
Answer: (b)