RBI's balance sheet increases by 11.08% at USD 845 billion; 2.5 times bigger than Pakistan's GDP

In comparison to the country's GDP, RBI's balance sheet has increased to 24.1% in March 2024 from 23.5% a year ago, according to the RBI annual report.
Reserve Bank of India
Reserve Bank of India

MUMBAI: The RBI's balance sheet stood at Rs 70.48 trillion or $845 billion an increase of 11.08 per cent and is 2.5 times bigger than the GDP of Pakistan which stood at close to $340 million.

The figure is also almost double the GDP of Bangladesh for the same period which stood at $446.3 billion.

In comparison to the country's GDP, RBI's balance sheet has increased to 24.1% in March 2024 from 23.5% a year ago, according to the RBI annual report.

The central bank's income rose 17.04 percent in FY24 while expenditure came down by 56.3 percent.

Further, the rise in income from foreign securities' interest led to surplus surging by 141.23 percent to Rs 2.11 trillion in the year, all of which has been transferred to the government as a dividend last week.

In absolute terms, the balance sheet increase is to the tune of Rs 7.03 trillion over Rs 63.45 trillion for the year ending March 2023.

In addition, the RBI provided Rs 42,820 crore towards the contingency fund in FY24. The RBI saw a gain of Rs 83,616 crore from forex transactions during the year, while interest income from foreign securities rose to Rs 65,328 crore, which allowed it to increase the size of the contingency fund.

Accordingly, the monetary authority’s net income stood at Rs 2.11 trillion at end-March 2024 after making a provision of Rs 42,819.91 crore, significantly down from Rs 1,30,875.75 crore in the preceding fiscal.

The amount made towards provisioning is transferred to the national contingency fund. The central bank’s net income in FY23 was only Rs 87,420 crore.

RBI had a net income of Rs 2.11 trillion in the financial year 2024, up from Rs 87,420 crore in the previous year with a jump in interest income from foreign securities, its annual report showed.

Like in FY23, no provision was made towards the asset development fund, the RBI said.

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The balance sheet reflects activities carried out in pursuance of the various functions of the RBI including issuance of currency as well as monetary policy and reserve management objectives.

According to the annual report, the increase on assets side in the balance sheet is due to the rise in foreign investments, gold, and loans and advances by 13.90 percent, 18.26 percent and 30.05 percent, respectively during the year under review.

On the liabilities side, expansion is due to the increase in the currency notes issued, deposits and other liabilities which grew by 3.88 percent, 27 percent and 92.57 percent, respectively.

The RBI further said domestic assets constitute 23.31 percent while foreign currency assets and gold, including the gold deposits and gold held in the country, and loans and advances to financial institutions outside the country constitute 76.69 percent of the assets as of end March 2024, as against 26.08 percent and 73.92 percent, respectively, as of March 2023.

The Reserve Bank holds 822.10 tonne of gold, of which 308.03 tonne are held as backing for the banknotes issued as of March 2024. The value of gold held as asset rose by 16.94 percent from Rs 1.41 trillion as of end March 2023 to Rs 1.65 trillion as of end March 2024. The central bank said the increase in the value of gold is due to the addition of 6.94 tonnes of gold, along with the increase in the price of gold and the depreciation of the rupee against the dollar.

The annual report is a statutory report of the RBI's central board of directors. The report covers the working and functions of the Reserve Bank of India for the April 2023-March 2024 period.

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