The Reserve Bank of India significantly reduced its foreign exchange market intervention in November, net selling $9.70 billion compared to $11.80 billion in the previous month, as the central bank worked to manage rupee depreciation pressures.

Currency Performance and Central Bank Intervention

The Indian rupee experienced notable weakness during November, depreciating by over 0.70% as market pressures mounted. The RBI's intervention through dollar sales represents a key monetary policy tool used to prevent excessive volatility in the currency markets.

Real Effective Exchange Rate Trends

India's real effective exchange rate, which represents the weighted average of the rupee against a basket of six major international currencies, showed a declining trend in recent months. The REER decreased to 94.20 in December from 96.17 in November.

Market Implications

The reduction in RBI's dollar sales from October to November suggests a measured approach to currency management, balancing intervention needs with market dynamics. The central bank's foreign exchange operations remain a critical component of India's monetary policy framework, particularly during periods of currency volatility.

The REER decline indicates that the rupee has weakened not just against the dollar but across multiple major currencies, reflecting broader economic pressures on the Indian currency. This comprehensive measure provides insight into the rupee's overall competitiveness in international markets.

Bank of India announced its unaudited financial results for the third quarter ended December 31, 2025, demonstrating strong operational performance and continued business growth. The bank achieved significant milestones in both profitability and asset quality metrics during the quarter.

Financial Performance Highlights

The bank's financial performance for Q3FY26 showed consistent growth across key parameters. Net profit for the quarter reached ₹2,705 crores, marking a 7.47% increase compared to ₹2,517 crores in Q3FY25. For the nine-month period (9M-FY26), net profit grew by 14% year-on-year to ₹7,511 crores, indicating sustained profitability momentum.

Operating profit for Q3FY26 increased by 13.24% year-on-year to ₹4,193 crores, while for 9M-FY26, it grew by 4% to ₹12,023 crores. Non-interest income showed remarkable growth of 30% year-on-year for Q3FY26, reaching ₹2,279 crores.

Business Growth and Balance Sheet Expansion

Bank of India achieved a significant milestone as its global business crossed ₹16 lakh crores, reaching ₹16,27,602 crores with a growth rate of 12.54% year-on-year. Global advances registered strong growth of 13.63% year-on-year, totaling ₹7,40,314 crores. Domestic advances outperformed with 15.16% year-on-year growth, while overseas advances grew by 5.70% year-on-year.

The retail, agriculture, and MSME (RAM) segment continued to drive growth, with RAM advances increasing by 18.05% year-on-year. The RAM percentage share in total advances improved to 58.54%, reflecting the bank's focus on priority sector lending.

Asset Quality Improvement

Asset quality metrics showed substantial improvement across all parameters. The Gross NPA ratio declined significantly to 2.26% as of December 31, 2025, representing an improvement of 143 basis points year-on-year from 3.69% in the previous year. Net NPA ratio improved to 0.60%, down by 25 basis points year-on-year.

Provision Coverage Ratio (PCR) improved by 112 basis points year-on-year to 93.60%, indicating stronger provisioning buffers. The slippage ratio for 9M-FY26 improved by 36 basis points year-on-year to 0.64%, while credit cost for the nine-month period improved by 30 basis points to 0.42%.

Capital Adequacy and Digital Banking

The bank maintained robust capital adequacy with Capital Adequacy Ratio (CAR) at 17.09% as of December 31, 2025, well above regulatory requirements. This represents an improvement of 109 basis points year-on-year, providing adequate capital buffer for future growth.

In digital banking initiatives, the bank added over 7 lakh customers during Q3FY26, bringing total UPI customers to over 242 lakh. The share of alternate channels in total transactions increased to approximately 96% in Q3FY26, demonstrating successful digital transformation efforts.

Profitability Ratios and Margins

Net Interest Margin (NIM) for domestic operations stood at 2.80% for Q3FY26, while global NIM was 2.57%. For the nine-month period, domestic and global NIMs were 2.76% and 2.51% respectively. Return on Assets (ROA) and Return on Equity (ROE) for Q3FY26 increased to 0.96% and 15.34% respectively, indicating improved efficiency in asset utilization and shareholder returns.