Reserve Bank total income dips a shade to Rs 21,848 crore

Our Banking Bureau

Mumbai, Aug 28: THE decline in earnings from domestic sources has resulted in a marginal dip in the total income of the Reserve Bank of India (RBI) by Rs 112.10 crore during 2000-2001 (July-June). Total income declined by 0.5 per cent to Rs 21,848.87 crore from Rs 21,960.97 crore in 1999-2000.

Total domestic income dwindled sharply by nearly 24 per cent to Rs 11,762.79 crore last year against Rs 15,446.24 crore of income during the previous year. However, the earnings from foreign sources increased substantially by 54.82 per cent, taking its share in the total income during the accounting year to 46.2 per cent in the latest year when compared to 29.7 per cent during 1999-2000. The actual income from foreign sources jumped from Rs 6,514.73 crore to Rs 10,086.08 crore.

The central bank had a surplus of Rs 9,350 crore transferable to the central government, which is inclusive of Rs 1,479 crore towards interest differential on special securities converted into marketable securities. In 1997-98, RBI held special securities of the order of Rs 20,000 crore carrying interest at 4.6 per cent per annum.

These securities were converted into marketable securities at market related rates to augment the stock of eligible securities in RBI’s investment portfolio for open market operations.

The transfer to government was intended to compensate the government for the difference in interest expenditure, which the government had to bear consequent upon conversion, RBI said in its annual report.

While the net disposable income of the RBI for the year ended June 2001 amounted to Rs 9,354 crore, Rs four crore out of this was transferred to four statutory funds, at the rate of Rs one crore each.

Though the transfer to statutory funds on a significant scale was discontinued since 1991-92, pending amendment to RBI Act 1934 for vesting in the RBI the discretion to transfer funds from its profits, this token contribution has been made.

During 2000-01, there was an accretion of Rs 1,516.01 crore to the Exchange Fluctuation Reserve (EFR) raising the balance to Rs 29,124.44 crore as on June 30, 2001 from Rs 27,608.43 crore on the same day the previous year. EFR represents accumulated net gain on valuation of foreign currency assets and gold. The rise in EFR is mainly due to appreciation in the value of foreign currency assets.
EFR at the end of June 2001 was equivalent to 14.2 per cent of foreign currency assets and gold holdings of the RBI as against 16.8 per cent the same day the previous year.

The Exchange Equalisation Account (EEA), which is utilised to meet exchange losses on accrual basis in respect of liabilities under the schemes involving exchange guarantees offered by the bank to domestic financial institutions, stood at Rs 49.46 crore as on June 30, 2001. This figure was arrived at after the institutions have fully withdrawn the same on February 5, 2001.