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Profit on gilt sales surge 37 times at Rs 3060 crore

BS Banking Bureau in Mumbai

The Reserve Bank of India has booked a massive 37 times increase in profit on sales of government securities at Rs 3060.04 crore (Rs 30.60 billion) in 2001-02 against Rs 82.23 crore (Rs 822 million) in the previous fiscal. This has helped in propping up the central bank's total income by 13 per cent to Rs 24,690.34 crore (Rs 246.90 billion) from Rs 21,848.87 crore (Rs 218.49 billion) the previous year.

The total expenditure of the central bank has also increased by 17.1 per cent to Rs 6542.39 crore (Rs 65.42 billion) from Rs 5587.52 crore (Rs 55.87 billion) in 2000-01. The RBI follows an accounting year of July to June.

The share of domestic sources in the total income was 59.6 per cent, while that of foreign sources was 40.4 per cent. The net total income has risen 12.88 per cent to Rs 16,866.39 crore (Rs 168.66 billion) compared with Rs 14,941.52 crore (Rs 149.41 billion) in 2000-01.

Owing to the profit booked on gilt sales, the domestic income of RBI rose 25 per cent to Rs 14,703.88 crore (Rs 147.04 billion) in 2001-02 compared with Rs 11,762.79 crore (Rs 117.63 billion). Despite the reduction in interest rates applicable to the ways and means advances, the interest income on these advances showed an increase of 27.14 per cent to Rs 952.48 crore (Rs 9.52 billion) as against Rs 748.13 crore (Rs 7.48 billion).

Net earnings from the deployment of foreign currency assets, including gold, decreased by 1 per cent to Rs 9986.46 crore (Rs 99.86 billion) as against Rs 10,086.08 crore (Rs 100.86 billion) following a lower return on investment.

However, the average level of foreign currency assets was higher by 32.61 per cent at Rs 2,23,565 crore (Rs 2,235.65 billion) compared to Rs 1,68,577 crore (Rs 1,685.77 billion).

Lower interest rates in international markets pulled down the net earnings on foreign currency assets and gold to 4.5 per cent in 2001-02 against 6 per cent in 2000-01.

Rise in interest payment and establishment expenditure has led to an increase in the expenditure of the central bank. Interest payments increased 17 per cent to Rs 2334.99 crore (Rs 23.35 billion) in 2001-02 from Rs 1994.8 crore (Rs 19.95 billion) in 2000-01. Establishment expenses increased 49.8 per cent to Rs 1,304.86 crore (Rs 13.05 billion) from Rs 870.85 crore (Rs 8.71 billion) following a provision of Rs 440.8 crore (Rs 4.41 billion) for gratuity and pension funds.

Due to an upward revision in rates of printing currency notes and larger component of higher denomination rates, the cost of printing of currency notes, cheques and other forms increased by 16.2 per cent to Rs 1304.49 crore (Rs 13.04 billion) compared to Rs 1122.78 crore (Rs 11.23 billion).

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RBI Annual Report 2001-02
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