Earnings from domestic assets boost RBI's FY13 income by 39.8%

Revenues from domestic sources rose 60.7% from Rs 33,366 cr in FY12 to Rs 53,611 cr in FY13

The Reserve Bank of India (RBI)’s gross income rose 39.8 per cent to Rs 74,358 crore for the year ended June from Rs 53,176 crore in the previous year, on a sharp increase in earnings from domestic assets.

Revenues from domestic sources rose 60.7 per cent from Rs 33,366 crore in FY12 to Rs 53,611 crore in FY13. Foreign operations saw 4.7 per cent growth at Rs 20,746 crore in 2012-13 from Rs 19,810 crore in 2011-12. RBI’s accounting year ends in June.

The central bank made a payment of Rs 33,000 crore, highest ever transfer, to the government as surplus profit for the year ended June, more than double the amount paid in 2011-12. The payout in 2011-12 was Rs 16,010 crore.

The income from foreign sources is mainly derived from deployment of foreign currency assets. The rate of earnings on foreign currency assets was low at 1.5 per cent in 2012-13 due to low interest rates prevalent in international markets, RBI said in its annual report for 2012-13..

RBI parks foreign exchange reserves in high-rated bonds and deposits. It follows three principles — safety, liquidity and returns while deploying reserves abroad.

On the domestic front, RBI’s earnings rose by 60.7 per cent from Rs 33,366 crore in FY12 to Rs 53,611 crore in FY13. The net income from domestic securities was up 65.6 per cent to Rs 50,367 crore in FY13 from Rs 30,424 crore in 2011-12.

The net increase was due to a rise in coupon income to Rs 40,868 crore from Rs 27,673 crore in 2011-12. However, there was a dip in interest income from the liquidity adjustment facility (LAF) and the marginal standing facility (MSF) to Rs 6,479 crore in 2012-13 from Rs 7,766 crore in FY12. It declined due to a repo rate cut and decline in the average daily liquidity injection under the LAF window.

The rate of earnings on average domestic assets rose from 5.4 per cent in the previous year to 7.2 per cent in 2012-13.