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Ansh Kadam
Founder & CEO at Bui... • 7m
How does RBI earn money ? & why the RBI is more of a banker than a regulator. Last year, the RBI transferred over ₹87,000 Crore to the government, and it's expected to surpass ₹1,00,000 Crore in FY 2025. But how does the RBI generate this enormous revenue? It’s all about understanding smart financial strategies, something the RBI excels at. In 2023, the RBI’s main source of income was interest, earning a staggering ₹1.4 Lakh Crore. Here’s how it works: - When the government needs money, it raises funds by issuing bonds—essentially loans from the public. - The RBI acts as a middleman, facilitating the sale of these bonds and even buying/selling them in bulk to manage inflation and money supply. - While holding these bonds, the RBI earns interest. That’s not all. The RBI also earns interest from its forex reserves, currently valued at $704 Billion Dollars. The RBI also profits from buying and selling foreign currencies, capitalizing on price differences, if any, to generate additional income. Takeaway : Whether you're running a central bank, a business, or a startup, the lesson is clear, smart financial planning is the key to long-term success. Want more actionable insights on business, startups, and growth? Subscribe to my newsletter through the link in the comments!
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