The Reserve Bank of India’s (RBI) gross income for 2010-11 rose 12.7 per cent to Rs 37,070 crore from Rs 32,884 crore a year ago, owing to an increase in earnings from domestic assets. The increase more than offset the decline in income from foreign sources. RBI's accounting year ends in June.
Earnings from the deployment of foreign currency assets and gold declined 15.7 per cent to Rs 21,150 crore in the year ended June. However, earnings from domestic sources rose 105 per cent to Rs 15,920 crore at the end June from Rs 7,782 crore in 2009-10.
This is a consecutive year that the central bank’s earnings from foreign currency assets have taken a knock, in an environment marked by huge liquidity and low interest rates. Developed economies are still struggling to fight the effects of the global financial crisis of 2008.
RBI, in its annual report, said the rate of earnings on foreign currency assets and gold dipped to 1.7 per cent in 2010-11 from 2.09 per cent in 2009-10. The rate of earnings in 2008-09 was 4.16 per cent. RBI parks foreign exchange reserves in high-rated bonds and deposits. It follows three principles—liquidity and returns—while deploying reserves abroad.
Referring to the domestic sources of income, RBI said the increase in domestic income was mainly due to aspects like the effect of earnings on liquidity adjustment facility operations.
The governments' cash management operations involving greater use of ways and means advances and higher coupon receipt on an increased portfolio of government securities also helped raise domestic earnings.
The rate of earnings on average domestic assets improved to 3.77 per cent in 2010-11 from 3.45 per cent in the previous year, the central bank said.
The surplus transferable to the government dipped 20 per cent Rs 15,009 crore for the financial year ended June. In 2009-10, the surplus declined to Rs 18,759 crore from Rs 25,009 crore in 2008-09.
Total expenditure rose by three per cent to Rs 8,655 crore for 2010-11 from Rs 8,403 crore in 2009-10. The rise in expenditure was largely due to an increase in establishment expenditure and agency charges, which was moderated by a decline in security printing charges, RBI said.
