Higher income in RBI supported by forex earnings and reduced provisioning – Banking & Finance News

The Reserve Bank of India (RBI) is set to transfer a record dividend of Rs 2.11 trillion to the Centre, thanks to higher forex income, lower provisioning, and reduced expenses. The banking regulator’s net income for FY24 rose to Rs 2.11 trillion, marking a significant increase from the previous year.

The overall balance sheet size of the RBI increased by 11.08% to Rs 70.47 trillion, with the central bank attributing the rise in net income to a 23% increase in income from foreign sources, a 67% drop in provisioning, and a 56% reduction in expenditure.

The RBI’s assets saw a significant increase, with foreign investments, gold, and loans and advances rising by 13.90%, 18.26%, and 30.05%, respectively. On the liabilities side, notes issued, deposits, and other liabilities also saw an expansion.

The central bank made gains of Rs 83,616 crore from foreign exchange transactions and saw interest income from foreign securities rise to Rs 65,328 crore. Total expenditure decreased to Rs 64,694 crore, while provisioning fell drastically to Rs 42,819.91 crore.

The balance sheet of the RBI reflects its activities, including the issuance of currency, monetary policy, and reserve management objectives. The central board of the RBI recently decided to raise provisions required under the contingent risk buffer to 6.50% for FY24, in line with the Jalan committee recommendations.

Overall, the RBI’s strong financial performance in FY24 is expected to benefit the Centre significantly, providing a boost to the country’s economy.