RBIs income rises despite global slump

Written by fe Bureaus | Mumbai | Updated: Aug 29 2009, 04:10am hrs
Backed by an increase in income from the domestic sources, gross income of the Reserve Bank of India (RBI) rose 5.16% to Rs 60,731.98 crore for 2008-09 as against Rs 57,750.79 crore in 2007-08.

Income from domestic sources in 2008-09 rose to Rs 9,935.77 crore from the year-ago amount of Rs 5,867.52 crore, primarily on account of increase in the interest on domestic securities and liquidity adjustment facility operations, which increased to Rs 8,683.11 crore in 2008-09 from Rs 4,533.87 crore in 2007-08, and interest on loans and advances increasing to Rs 1,254.80 crore in 2008-09 from Rs 325.60 crore in 2007-08. During the year, income from domestic sources increased 69.34%.

The surplus transferable to the government of India for the year 2008-09 amounted to Rs 25,009 crore, including Rs 1,436 crore towards the interest differential on special securities converted into marketable securities for compensating the government for the difference in interest expenditure which the government had to bear consequent on conversion of such special securities, the annual report released for 2008-09 by the RBI said.

Transfer to contingency reserve has dropped from Rs 33,430 crore in 2007-08 to Rs 26,191 crore in 2008-09. The transfer to asset development reserve has also dropped from Rs 3,207 crore to Rs 1,309 during the same period.

However, the central banks earnings from the deployment of foreign currency assets and gold decreased 2.1% or Rs 1,087.06 crore from Rs 51,883.27 crore in 2007-08 to Rs 50,796.21 crore in 2008-09, mainly on account of fall in interest rates in the international markets. Before accounting for mark-to-market depreciation on securities, the rate of earnings on foreign currency assets and gold was 4.24% in 2008-09 as against 5.09% in 2007-08. The rate of earnings on foreign currency assets and gold, after accounting for depreciation, decreased from 4.82% in 2007-08 to 4.16% in 2008-09. Meanwhile, total expenditure of the RBI increased 34.78%, or Rs 2,120.75 crore, to Rs 8,217.88 crore in 2008-09 from Rs 6,097.13 crore in 2007-08.

Establishment expenditure for the year 2008-09 stood at Rs 2,448.25 crore as compared to Rs 1,430.87 crore during the year 2007-08, portraying an increase of 71.10%.

This also includes provision towards gratuity and superannuation fund and leave encashment fund for retiring employees of Rs 1,037.92 crore as against Rs 221.02 crore recorded the previous year. The increase in provision is mainly on account of enhancement of long-term employee benefits. Salaries accounted for 17.39% of the total establishment expenditure whereas allowances were 15.34% and other miscellaneous expenses were 23.41% of the total establishment expenditure.