The Reserve Bank of India’s balance sheet crossed Rs 4 lakh crore in 2011-12 (July-June) due to an increase in holdings of domestic securities and foreign assets.
The central bank reported an increase of 22 per cent in its balance sheet size over the previous year. “The increase in domestic securities was mainly on account of the large-scale open-market purchases of government securities undertaken by the Reserve Bank for injection of liquidity,” said the report.
The central bank injected Rs 2.14 lakh crore via open market operations (OMOs) during 2011-12 (July-June). The increase in foreign assets was mainly due to valuation effect on the portfolio arising due to depreciation of the rupee against the dollar in the period.
The central bank’s gross income grew by 43.4 per cent from Rs 37,070 crore to Rs 53,176 crore in 2011-12 (July-June). “The significant increase in income from domestic sources offsets the decline in income from foreign sources,” said the bank.
Earnings from domestic sources doubled due to earnings from liquidity adjustment facility operations, higher coupon receipts on an increased portfolio of government securities and profit on sale of securities. Earnings from foreign assets fell for the third year in a row. The rate on earnings from foreign currency assets and gold was lower at 1.47 per cent in 2011-12 compared with 1.74 per cent in 2010-11 due to low interest rates in the international markets.
On the liabilities side, currency in circulation and accretion to the currency and gold revaluation account increased. RBI’s expenditure increased by 17.1 per cent to Rs 10,137 crore while the transfer to contingency reserve increased to 46.4 per cent of gross income from 32.8 per cent a year ago. The surplus transferable to the government was Rs 16,010 crore.
