Increase in income, sharp decline in expenditure helped RBI’s central board to announce record surplus transfer to the government
A 17 per cent increase in income and a sharp 56 per cent decline in expenditure helped the RBI’s central board announce a big bounty for the government, entailing an all-time high surplus transfer of ₹2,10,874 crore for FY24.
The surplus transfer in FY24 is a 141 per cent jump over ₹87,416 crore in FY23.
A break-up of the FY24 income shows that while interest income increased 32 per cent year-on-year (y-o-y) to ₹1,88,606 crore (₹1,43,073 crore in FY23), other income declined about 6 per cent y-o-y to ₹86,967 crore (₹92,384 crore), according to RBI’s latest annual report.
Interest income has two components: from domestic sources (interest on holding of rupee securities, net interest in liquidity adjustment facility operations, interest on standing deposit facility, interest on marginal standing facility operations, and interest on loans & advances) and from foreign sources (interest income from foreign securities, net interest on repo and reverse repo transactions, and interest on deposits).
Other income also has two components: from domestic sources (including commission, profit or loss on sale and redemption of rupee securities, and amortisation of premiums and discounts on rupee securities) and from foreign sources (including exchange gain or loss from foreign exchange transactions and amortisation of premiums and discounts on foreign securities).
On the expenditure side, the decline was mainly on account of a sharp 67 per cent y-o-y dip in provisions to ₹42,820 crore (₹1,30,876 crore). This specific provision has been transferred to the Contingency Fund (CF).
CF is meant for meeting unexpected and unforeseen contingencies, including depreciation in the value of securities, risks arising out of monetary and exchange rate policy operations, systemic risks, and any risk arising on account of special responsibilities enjoined upon the Reserve Bank.
Overall, the expenditure, including components such as provisions, printing of notes, agency charges, employee costs, and miscellaneous expenses, dwindled 56 per cent y-o-y to ₹64,694 crore (₹1,48,037 crore).
The size of the RBI’s balance sheet increased by 11 per cent y-o-y from ₹63,44,756 crore as of March 31, 2023 to ₹70,47,703 crore as of March 31, 2024.
The increase on the asset side was due to a rise in foreign investments, gold, and loans and advances (to central and State governments, banks, and foreign institutions outside India) by 14 per cent (to ₹48,02,057 crore as of March-end 2024), 18 per cent (to ₹4,39,319 crore), and 30 per cent (to ₹3,75,593.50 crore), respectively.
On the liabilities side, expansion was due to an increase in notes issued, deposits, and other liabilities by 4 per cent (to ₹34,78,039.50 crore), 27 per cent (to ₹17,19,838.56 crore), and 93 per cent (to ₹2,60,521 crore), respectively.
Domestic assets constituted 23 per cent, while foreign currency assets, gold (including gold deposits and gold held in India), and loans and advances to financial institutions outside India constituted 77 per cent of total assets as on March 31, 2024 as against 26 per cent and 74 per cent, respectively, as on March 31, 2023.
The available realised equity (capital + reserve fund + CF + asset development fund) increased to 6.50 per cent of the RBI’s balance sheet, up from 6 per cent in FY23.
Gold holding
As of March 31, 2024, total gold held by the Reserve Bank was 822.10 tonnes, compared with 794.63 metric tonnes as of March 31, 2023. This increase is on account of the addition of 27.47 tonnes of gold during the year.
Of 822.10 tonnes as of March 31, 2024, 308.03 tonnes of gold are held as backing for notes issued, compared with 301.09 metric tonnes as of March 31, 2023. The balance of 514.07 tonnes as of March 31, 2024, as compared to 493.54 metric tonnes on March 31, 2023, is treated as an asset of the Banking Department (BD).
The value of gold (including gold deposits) held as an asset of BD increased by 19 per cent from ₹2,30,734 crore as of March 31, 2023 to ₹2,74,714 crore as of March 31, 2024.