The Reserve Bank of India (RBI) has reported a significant increase in its earnings for the financial year 2023-24, driven by a strong performance from both foreign and domestic sources, helping it to give a record Rs 2.11 lakh crore dividend to the government.
According to its Annual Report, the RBI’s income from foreign sources surged by 23.23%, climbing from Rs 1,52,128.54 crore in 2022-23 to Rs 1,87,471.20 crore in 2023-24. This remarkable growth is attributed to an improved rate of earnings on foreign currency assets, which rose to 4.21% from 3.73% in the previous year.
Key components contributing to this growth include interest, discount, exchange gain/loss, and capital gain/loss on securities related to Foreign Currency Assets. The average FCA also witnessed a positive trend, increasing from Rs 40,81,053.94 crore to Rs 44,52,358.86 crore, showcasing a growth of Rs 3,71,304.92 crore or 9.10%.
Moreover, the earnings from FCA as a percentage of average FCA increased from 3.73% to 4.21%, reflecting a 0.48% rise, which translates to a substantial 12.87% increase.
Domestic earnings
Domestic earnings also saw an uptick, with net income increasing by 5.73% from Rs 83,328.72 crore in 2022-23 to Rs 88,101.12 crore in 2023-24. The increase was primarily due to a decrease in net outgo of interest under the Liquidity Adjustment Facility (LAF), Marginal Standing Facility (MSF), and Standing Deposit Facility (SDF).
Notably, net interest income from LAF, MSF, and SDF operations showed a significant improvement, reducing the deficit from Rs (-)16,152.10 crore in 2022-23 to Rs (-)9,255.51 crore in 2023-24. This improvement was largely due to lower liquidity in the banking system during the current year.
The RBI also benefited from a substantial profit on the sale and redemption of Rupee Securities, which jumped from a loss of Rs(-)222.
This surge in earnings from foreign sources indicates a robust performance by the RBI in managing its foreign currency assets and leveraging various financial instruments effectively. The growth in earnings signifies resilience and adaptability in navigating the challenges posed by the global economic landscape.
