Rising wage bill pushes RBI's establishment spend by 16%

Rising wage bill pushed up the establishment expenditure of the Reserve Bank by about 16% to Rs 2,300.71 crore during 2010-11 (July-June).

The establishment expenditure during the financial year increased by Rs 313.89 crore mainly "due to the revision of wages of all categories of staff with retrospective effect," said the RBI's annual report released today.

In 2009-10, the expenses were Rs 1,986.82 crore.

The report further said income of the central bank from foreign assets declined for the second successive year to Rs 21,149.69 crore in 2010-11 on account of low interest rates in international markets.

"However, the decline in income from foreign assets in 2010-11 was more than offset by earnings from domestic assets which have expanded," it said.

On the other hand, its earnings from domestic sources increased by Rs 8,138.84 crore to Rs 15,920.43 crore in 2010-11 from Rs 7,781.59 crore in the previous year.

The 104.59% increase was mainly due to the effect of earnings on LAF (liquidity adjustment facility) operations, government's cash management operations and higher coupon receipt on an increased portfolio of government securities, RBI added.

The report further said the available balance of Rs 1,70,727.87 crore (as on June 30) in the Contingency Reserve (CR) "is considered sufficient to meet contingent liabilities".

The RBI maintains a CR to enable it to absorb unexpected and unforeseen emergencies.