RBI releases annual report; central bank's income jumps 146.5% to Rs 1.93 lakh crore

The Reserve Bank of India's (RBI) balance sheet expanded by 13.42 percent to Rs 41.03 lakh crore while its income soared by 146.59 percent to Rs 1.93 lakh crore in 2018-19, the central bank said in its Annual Report released on August 29.

The apex bank's interest income grew 44.62 percent to Rs 1.06 lakh crore and other income rose to Rs 86,199 crore as on June 30, 2019, from Rs 4,410 crore a year ago.

The RBI's holding of government securities grew by 57.19 percent, from Rs 6.29 lakh crore to Rs 9.89 lakh crore as on June 30, 2019. "The increase was on account of liquidity management operations conducted by way of net purchase of government securities amounting to Rs 3.31 lakh crore," the RBI said.

RBI's foreign exchange gains rose to Rs 28,998 crore, as compared to a loss of Rs 4,067 crore in the previous year. "During the year, exchange gain/loss has been computed using weighted average cost method resulting in an impact of Rs 21,464 lakh crore," RBI said.

Also, the writeback excess risk provision of Rs 52,637 crore from the contingency fund also added to the income. The balance in contingency fund as on June 30, 2019 was Rs 1.96 lakh crore as compared to Rs 2.32 lakh crore as on June 30, 2018. The contingency fund helps meet unexpected contingencies like depreciation in the value of securities, risks arising out of monetary or exchange rate policy operations and systemic risks.

These factors contributed to unusually high surplus transfer this year. Over the past four years, the surplus ranged between Rs 30,000-65,000 crore.

The transferable surplus to the government for the year 2018-19 came to Rs 1.76 lakh crore, based on adjustments made after the Economic Capital Framework (ECF) was adopted by the bank's central board earlier this week. The new framework was part of the Bimal Jalan committee recommendations released on August 27.

This includes Rs 28,000 crore transferred to the government during the year.

The apex bank's total assets constituted of 28.03 percent of domestic assets and 71.97 percent of foreign currency and gold as of June 30, 2019. The share of domestic assets was 23.18 percent, while foreign currency and gold were at 76.82 percent a year ago.

As on June 30, 2019, the RBI held 618.16 metric tonnes of gold as compared to 566.23 metric tonnes as on June 30, 2018. The increase is on account of addition of 51.93 metric tonnes of gold during the year.

The RBI's expenditure fell by 39.72 percent to Rs 17,045 crore in 2018-19. This includes a provision of Rs 64 crore was made towards Asset Development Fund.

The notes issued in 2018-19 increased by 13.43 percent from Rs 19.11 lakh crore as on June 30, 2018 to Rs 21.68 lakh crore as on June 30, 2019.

The RBI's Annual Report details the apex lender's working and operations between July-June every year. One of the recommendations of Bimal Jalan committee report is that the central bank should align its accounting year to the Arpil-March fiscal year for better understanding.