14 August, 2009

Independence Day gift for govt: Rs 25k-cr profit from RBI

The Reserve Bank of India (RBI) has transferred to the government, for FY09, a balance-sheet surplus, which is 66% higher than the previous year. But this huge fund transfer may have been possible only by providing less for contingencies.

Every year, RBI transfers to the government whatever surplus is left over, after setting aside a big chunk of its earnings to the contingency reserve (CR) and asset development reserve (ADR). The CR and ADR are the central bank’s war chests to combat volatility in markets and to fund new ventures in the financial sector. However, the details of its income and expenditure will be known only when the central bank publishes its annual report later this year. 

A statement issued by RBI said the central board had approved the transfer of surplus profit amounting to Rs 25,009 crore to the Government of India for the year ended June 30, 2009 against Rs 15,011 crore for the year ended June 30, 2008.