India reserve money (M0) — the components and sources of base money
Quick answerIndia’s reserve money (M0) — the base money the RBI creates — is of the order of Rs 47 lakh crore in 2024-25 per the RBI’s weekly data. Its largest component is currency in circulation (about 77%), followed by bankers’ deposits with the RBI (about 21%, mainly CRR balances) and a small ‘other deposits’ residual. On the sources side, the RBI’s net foreign assets are the dominant driver.
The chart above is a visual summary; the table below carries the same RBI figures so they are readable without JavaScript — for accessibility and AI answer engines.
Components of reserve money (M0) — approximate share (2024-25)
| Component (use of reserve money) | Approx. share of M0 |
| Currency in circulation | 77% |
| Bankers' deposits with the RBI (incl. CRR) | 21% |
| 'Other' deposits with the RBI | 2% |
| Reserve money (M0) total | 100% |
Approximate structural shares from the RBI Weekly Statistical Supplement (reserve money and its components); shares move only gradually. For the exact latest figures see the RBI source linked below.
Where reserve money comes from — the sources side
The same reserve money can be read off the RBI balance sheet as a set of sources. In recent years the RBI’s net foreign assets have been the dominant source of base money.
Net foreign assets of the RBI
Largest source in recent years — RBI's foreign-exchange reserves, which expand reserve money when the RBI buys forex.
Net RBI credit to the Government
RBI's net claims on the centre & states; swings with the RBI's holdings of government securities and the centre's cash balances.
RBI credit to banks & the commercial sector
Liquidity injected to banks via the LAF / repo and refinance — variable and often small.
Government's currency liabilities to the public
Coins issued on government account — a small, slow-moving item.
Less: Net non-monetary liabilities of the RBI
A subtracting item (RBI's capital, reserves & other liabilities) that reduces reserve money.
What it means for bankers
Reserve money is the foundation the banking system builds on: through the CRR and lending, banks multiply M0 into the far larger broad money (M3). Because currency in circulation is roughly three-quarters of M0, cash demand directly drives base-money growth, while bankers’ deposits with the RBI move with the CRR and the RBI’s liquidity operations. On the sources side, RBI forex purchases add base money and forex sales drain it, which is why forex-reserve swings and policy-driven liquidity operations are central to managing system liquidity.
Reserve money (M0) FAQ
What is reserve money (M0) in India?
Reserve money (M0), also called base money or high-powered money, is the monetary base created by the RBI. It equals currency in circulation plus bankers' deposits with the RBI plus 'other' deposits with the RBI. In India it is of the order of Rs 47 lakh crore in 2024-25 per the RBI's weekly statistical supplement, and it supports the much larger broad money (M3) through the money multiplier.
What are the components of reserve money?
Reserve money has three components on the uses side: currency in circulation (about 77%, the largest), bankers' deposits with the RBI (about 21%, mainly the CRR balances banks keep with the RBI) and 'other' deposits with the RBI (about 2%).
What is the difference between reserve money (M0) and broad money (M3)?
Reserve money (M0) is the base money the RBI creates directly. Broad money (M3) is the much larger total of currency with the public plus all bank deposits. Banks multiply M0 into M3 through lending, so M3 is several times M0; the ratio M3/M0 is the money multiplier.
What are the sources of reserve money?
On the sources side, reserve money is created by net foreign assets of the RBI (forex reserves, the largest source recently), net RBI credit to the Government, RBI credit to banks and the commercial sector and the Government's currency liabilities to the public, less the RBI's net non-monetary liabilities.
Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable reserve-money JSON feed.
Source: RBI Weekly Statistical Supplement (Reserve Money and its components & sources),
rbi.org.in. We never reproduce RBI text verbatim; shares are approximate. Reviewed by
Vikram Jain. Last updated 19 Jun 2026, 02:49 IST.