RBI’s Income and Expenditure

Context

The Reserve Bank of India (RBI) announced a record surplus transfer to the government for the fiscal year 2024 (FY24), amounting to Rs 2,10,874 crore. This represents a significant increase compared to the previous year's surplus transfer.

Income and Expenditure Overview

Income: The RBI's total income saw a notable rise, driven primarily by an increase in interest income from both domestic and foreign sources.
- Interest income includes earnings from rupee securities, liquidity operations, and foreign securities. Despite a decline in other income categories, the overall income growth remained robust.
Expenditure: A sharp decline in provisions, which are funds set aside for contingencies, significantly reduced the RBI's overall expenditure.
- Other expenses such as the cost of printing notes, agency charges, employee costs, and miscellaneous expenses also saw reductions.

Balance Sheet Highlights

Asset Growth: The RBI's balance sheet grew due to increases in foreign investments, gold reserves, and loans and advances.
Increase in Gold Reserves: The RBI's gold reserves grew, with significant additions during the year. The gold is held as backing for notes issued and as an asset of the Banking Department (BD).
Available Realised Equity: The RBI's realised equity, which includes capital, reserve funds, the Contingency Fund, and the Asset Development Fund, increased as a percentage of the balance sheet, indicating a stronger financial position.

Components of Income

Components of Expenditure

Interest Income: Derived from domestic and foreign sources, including interest on rupee securities, loans and advances, and foreign securities.
Other Income: Includes earnings from commissions, profits or losses on the sale of securities, and exchange gains or losses from foreign exchange transactions.

Provisions: Allocations to the Contingency Fund (CF) for unexpected financial contingencies and risks associated with monetary and exchange rate policies.
Other Expenses: Costs related to printing currency notes, agency charges, employee expenses, and miscellaneous costs.