RBI Transfers Rs 1.3 Lakh Crore To Contingency Fund In FY23: Annual Report

The Reserve Bank of India transferred Rs 1.3 lakh crore towards its contingency fund in FY23.

The contingency risk buffer has been maintained at 6% as of March 2023, compared to 5.5% a year ago, according to the central bank's latest annual report released on Tuesday.

The contingency risk buffer has to be maintained at 5.5–6.5% under the RBI's existing economic capital framework.

As of March 31, 2023, Rs 1.65 lakh crore and Rs 19,417.6 crore were charged to the contingency fund on account of debit balances in the Investment Revaluation Account-Foreign Securities and the Investment Revaluation Account-Rupee Securities, respectively.

The net balance in the contingency fund rose 13% from a year ago to Rs 3.51 lakh crore.

The fund is a specific provision meant for meeting unexpected and unforeseen situations, including depreciation in the value of securities and risks arising out of systemic issues, monetary or exchange rate policy operations, and the RBI's special responsibilities.

RBI's balance sheet in FY23 rose 2.5% to Rs 63.4 lakh crore, led by foreign investments, gold, and loans and advances. An increase in notes issued, revaluation accounts, and other liabilities caused the rise in overall liabilities.

Interest income during the year rose 50% to Rs 1.43 lakh crore. Other income, too, rose 42% to Rs 92,384 crore.

The largest contributor to the other income during the year was gains from foreign exchange transactions. According to the annual report, such gains rose to Rs 1.03 lakh crore, up 50% year-on-year. Adjusting for amortisation of discount on foreign securities, loss on sale and redemption of such securities and other miscellaneous income, the other income from foreign sources stood at Rs 91,831 crore.

During the year, the RBI also recorded a loss of Rs 223 crore through sale and redemption of rupee securities, compared to a gain of Rs 6,028 crore a year ago.