RBI balance sheet expands 30% to Rs 533 trn on growth in forex reserves

Central bank's balance sheet saw a larger-than-normal size due to policy actions and liquidity infusion measures adopted to mitigate shock of Covid-19 outbreak

The Reserve Bank of India’s (RBI’s) balance sheet expanded by 30.02 per cent to Rs 533.47 trillion in FY20, thanks to growth in foreign exchange reserves.

RBI’s balance sheet saw larger than normal size due to policy actions and liquidity infusion measures adopted to mitigate the adverse shock induced by Covid-19.

As of June 30, 2019 (FY19), the size of the balance sheet was Rs 410.29 trillion. The RBI’s follows a July-June accounting year. However, the current year (FY21) will end in March 2021 to mark its transition to an April-March calendar (FY22 onwards).

Gross total income for FY20 amounted to Rs 1.5 trillion, compared to Rs 1.93 trillion in FY19. Last year’s income included a write-back of excess provision from the Contingency Fund, amounting to Rs 526.37 billion. Excluding the same from the previous year’s income, there was only a marginal rise in income in FY20, the RBI said in its annual report for FY20.

Expenditure for FY20 stood at Rs 925.40 billion, which included a risk provision of Rs 736.15 billion towards the Contingency Fund, compared to an expenditure of Rs 170.45 billion in FY19. The year ended with an overall surplus of Rs 571.28 billion, said the central bank. It transferred the surplus to the Centre as dividend.

Growth on the asset side was on account of an increase in both domestic (18.4 per cent) and foreign (27.28 per cent) investments. Loans and advances grew 245.76 per cent, while gold reserves rose 52.85 per cent. 

Domestic assets constituted 28.75 per cent, while foreign currency assets and gold constituted 71.25 per cent of overall assets, as of June 30.