BANKING
| RBI profit halves to Rs 32,884 crore in FY10 Tue, 24 Aug 2010 21:18:48 GMT |
| The Hindu RBI's profit halves to Rs 32,884 crore in FY10 After recording a steep growth for over four years, RBI’s profits almost halved to Rs 32,884 crore in FY10. However, its dividend payout to the government has not been commensurate with the revenue drop, indicating that it has transferred a larger share of its profits to the Centre. In its annual report for FY10, which was released on Tuesday, RBI said: “As return on foreign assets tracked the near-zero policy rates maintained by the central banks of advanced economies, income on such assets declined significantly.” As a result, the country’s foreign exchange reserves, which are parked with foreign central banks, yielded very low returns. As of end June 2010, RBI’s total foreign currency assets were worth $249.6 billion as the central bank had parked nearly half — $117.1 billion — in various foreign central banks, besides IMF and the BIS (Bank of International Settlements). The rate of earnings on foreign currency assets and gold was lower at 2.09% in 2009-10 compared with 4.16% in 2008-09. RBI has changed its accounting policy, which has improved its numbers. Shedding its earlier practice of ignoring any appreciation in the value of its securities, this year, in its balance sheet, it has booked depreciation as well as appreciation in security prices. With more than half its foreign currency assets parked in securities, this has helped RBI show an appreciation of Rs 9,370 crore under its Investment Revaluation Account as global security prices were moving up. RBI has also spent more by way of interest as it was continuously mopping up funds under its reverse-repo window. This resulted in gross income falling from Rs 60,732 crore in FY09 to Rs 32,884 crore in 2009-10. After meeting the necessary transfer to the contingency reserve and asset development reserve, Rs 18,759 crore was transferred to the government. |
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