Reserve Bank balance sheet grew by 8.46 per cent in FY22: Annual report

The year ended with an overall surplus of Rs 30,307.45 crore as against Rs 99,122 crore in the previous year, the RBI annual report showed

The Reserve Bank of India’s (RBI’s) balance sheet increased 8.46 per cent during FY22, reflecting mainly its liquidity and foreign exchange operations.

While income increased 20.14 per cent, expenditure went up 280.13 per cent, according to the RBI’s Annual Report for FY22.

Last financial year was the first full year of the April-March accounting cycle. Earlier the RBI followed the July-June financial year.

The year ended with a surplus of Rs 30,307.45 crore against Rs 99,122 crore in the previous year (FY21).

Earlier this month, the Central Board of Directors of the RBI had approved transferring Rs 30,207.45 crore as surplus to the Central government.

Income for FY22 rose to more than Rs 1.60 trillion from about Rs 1.34 trillion in FY21. However, expenditure shot up to about Rs 1.3 trillion due to provisions of Rs 1.15 trillion for the Contingency Fund and Rs 100 crore for the asset development fund, leading to a dip in surplus. “An increased transfer to the contingency funds given the increase in the RBI’s balance sheet size led to lower dividend payments of Rs 303 billion for FY22,” economists at YES Bank said. “Provisioning under ‘Contingency Fund’ at Rs 3.1 trillion, increased by 9.3 per cent while the balance sheet size was higher by 8.5 per cent YoY. From a high of 29 per cent of GDP in March 2021, the RBI balance sheet has now moderated to 26 per cent in March 2022. Further moderation is likely through FY23 given the RBI’s liquidity and FX operations this year to manage volatility in currency and bond market,” the report said.

The size of the balance sheet of the RBI increased by Rs 4,82,633.14 crore (8.46 per cent) from Rs 57,07,669.13 crore as on March 31, 2021 to Rs 61,90,302.27 crore as on March 31, 2022.

The rise on the asset side was due to increase in foreign and domestic investment, gold, and advances, the report said. Liabilities rose owing to increase in deposits, notes issued, etc.  Domestic assets constituted 28.22 per cent while foreign currency assets and gold constituted 71.78 per cent of the total as on March 31, 2022.