A major fraction of RBI's total income came from the 53.8 per cent surge in its domestic income for the year 1998-99 as compared to the previous year. "A net decline in the total expenditure during the period, including a marginal 1.1 per cent fall in interest expenses, has also contributed to the bank's bottomline," the RBI report said.

The apex bank's domestic income rose by Rs 4,517.44 crore to Rs 12,913.74 crore, reflecting increase in interest from holdings in government securities, ways and means advances (WMA) to the central and state governments and loans and advances to the banks and financial institutions -partially offset by the decrease in commission income.

"The increase in interest from governmentsecurities by Rs 3,089.98 crore to Rs 9,441.82 crore is mainly on account of increase in RBI's holdings of government paper from an average of Rs 1,24,887.62 crore in 1997-98 to Rs 1,45,184.70 crore in 1998-99 -with a larger share of longer term securities carrying higher yield. The increase in interest earnings on WMA by Rs 299.30 crore to Rs 614.20 crore in 1998-99 (representing a significant jump of about 95 per cent) was also mainly due to the increased recourse of this facility by the central and state government during the year," the RBI report said.

"During the accounting year ended June 30, 1999, the bank's net earnings from deployment in foreign currency assets including gold, rose by Rs 619.25 crore (10.9 per cent) to cross Rs 6,306 crore. This was primarily due to the higher average level of foreign currency assets, which offset the decline in net earnings on foreign currency assets and gold on account of lower interest rates prevailing in the international market," RBI said.

The report addedthat there was a net capital loss on sale of foreign securities amounting to Rs 20.67 crore. "This was on account of depreciation of Rs 189.62 crore, less realised capital gain of Rs 168.95 crore. However, the appreciation in the securities held in the bank's portfolio as at the end of June 1999, which is neither taken to the profit and loss account nor to the reserves, totalled Rs 93.93 crore," the apex bank annual report said.

The net disposable income for the apex bank at the end of financial year 1998-99 amounted to Rs 9,028.09 crore as against Rs 10,743.21 crore in 1997-98.