Contingency Reserve Up At Rs 29,912 Crore

While CR was created to absorb unexpected and unforeseen shocks, the purpose of ADR is to meet investment needs in RBI subsidiaries and associates.

The CR rose to Rs 29,911.56 crore as June 30, 2000 against Rs 23,007.06 crore in the corresponding year. The CR has gone up due to transfer of Rs 6,554.50 crore from income and transfer of the unutilised balance of Rs 350 crore from National Industrial Credit (long term operation) fund in 1999-2000. RBI has said that the balance in the CR is sufficient to meet contingent liabilities.

The RBI also transferred Rs 711.55 crore from income to the asset development reserve (ADR) raising its levels from Rs 2,456.30 crore as on June 30, 1999 to Rs 3167.85 crore as on June 30, 2000. In order to meet all internal capital expenditure and investment needs in subsidiaries and associates, RBI had created a separate ADR in fiscal 1998. The size of ADR is being pegged at one per cent of the RBI