What is the function of differential relay towards the transformer?

A differential relay for a transformer is designed to detect faults by comparing the current entering and exiting the transformer. Under normal operating conditions, the incoming and outgoing currents should be equal; any significant difference indicates a fault, such as a short circuit or ground fault within the transformer. When a discrepancy is detected, the relay triggers an alarm or disconnects the transformer from the power system to prevent damage and ensure safety. This protective mechanism helps maintain the reliability and integrity of electrical systems.