Foreign resources raked in the moolah for RBI in FY05

The Reserve Bank of India (RBI) has earned more income from foreign sources, while income from domestic sources declined during 2004-05.

According to RBI's Annual Report, earnings from the deployment of foreign currency assets and gold increased by a staggering 86.5 per cent at Rs 16,979.47 crore in 2004-05 as against Rs 9,103.50 crore a year ago.

This increase can be attributed to a rise in the level of foreign currency assets, hardening of short-term interest rates in the US and and lower mark-to-market depreciation on securities, the report said.

Before accounting for mark-to-market depreciation on securities, the rate of earnings on foreign currency assets and gold was 3.2 per cent in 2004-05 against 2.8 per cent in 2003-04.

The rate of earnings on foreign currency assets and gold, after accounting for depreciation, increased to 3.1 per cent in the reporting fiscal from 2.1% a year ago.

On the other hand, domestic income declined by a whopping 60.8 per cent at Rs 2,048.81 crore in 2004-05 from Rs 5,220.20 crore in 2003-04.

The decline in the income was mainly on account of high depreciation in the value of rupee securities on the back of hardening of yield, lower availment of ways and means advances by the central and state governments.

Further, investment of government's surplus balances in rupee securities from bank's portfolio and earmarking of certain securities to cover the liabilities in provident fund, superannuation fund and encashment of ordinary leave fund also added to the downsize of domestic sources of income, RBI added.

RBI's gross income for the year 2004-05 was Rs 19,028.28 crore compared with Rs 14,323.70 core in 2003-04, reflecting a gain of 32.8 per cent.

The share of transfer to contingency reserve, assert development reserve and surplus transferred to government was Rs 6,125.92 crore, Rs 687.09 crore and Rs 5400 crore.