The Reserve Bank of India (RBI) in its annual report released today says the high income earned via sale of foreign exchange led to higher transfer of surplus from the central bank to the Centre. The FY21 ended with the overall surplus of Rs 99,122 crore for the RBI against Rs 57,127.53 crore in the previous year. The earning from foreign exchange transactions recorded a 69 per cent rise in FY21 for the central bank.
The RBI's annual report accounts for only nine months from July 2020-March 2021 because it is is in the process of transitioning to an April-March fiscal from July-June earlier.
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"The year 2020-21 is significant for the change in the accounting year of the Reserve Bank to April - March (earlier July - June). Due to this transition, the accounting year 2020-21 was of nine months only, i.e., July 2020 - March 2021," said the RBI report.
"The year ended with an overall surplus of Rs 99,122 crore as against Rs 57,127.53 crore in the previous year, representing an increase of 73.51 per cent," the RBI report said.
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The RBI's balance sheet in FY21 (July-March) increased by 6.99 per cent for the year ended March 31, 2021, mainly reflecting its liquidity and foreign exchange operations. "The size of the balance sheet increased by Rs 3,72,876.43 crore, i.e., 6.99 per cent from Rs 53,34,792.70 crore as on June 30, 2020 to Rs 57,07,669.13 crore as on March 31, 2021," the report said.
The increase on the asset side was mainly due to increase in foreign and domestic investments by 11.48 per cent and 13.75 per cent, respectively, while the liability increase was due to increase in deposits (26.85 per cent), notes issued (7.26 per cent) and other (43.05 per cent), respectively.
While income for the year decreased by 10.96 per cent, the expenditure decreased by 63.10 per cent, it said.
A provision of Rs 20,710.12 crore was made and transferred to the Contingency Fund (CF) of the Centre, and it includes the total expenditure of Rs 34,146.75 crore in FY21. In FY20, the RBI's expenditure stood at Rs 92,540.93 crore, which included Rs 73,615 crore towards transfer to CF.
The RBI's balance sheet plays a critical role in the functioning of the country's economy, largely reflecting the activities carried out in pursuance of its currency issue function as well as monetary policy and reserve management objectives.
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