RBI to transfer Rs 87,416 cr surplus to govt for FY23, thrice FY22 figure
The board of the Reserve Bank of India has approved Rs 87,416 crore of surplus transfer to the government for the financial year 2022-23 –while deciding to keep the contingency risk buffer at 6%.
The surplus is almost three times of 2021-22, though the figures are not exactly comparable as FY22 was a nine month financial year for RBI. The central bank shifted its accounting year from July-June to April-March last year, in sync government’s fiscal year. RBI transferred Rs 30,307 crore in FY22.
In FY22, the contingency buffer was kept at 5.5 per cent. Provision towards the contingency fund was around Rs 1.15 trillion in FY22.
The surge in surplus is due to higher income during FY23 which was boosted by sale of foreign exchange reserves.
“The Board in its meeting reviewed the global and domestic economic situation and associated challenges including the impact of current global geopolitical developments,” the central bank said in a statement.
“The Board also discussed the working of the Reserve Bank during the year April 2022-March 2023 and approved the Annual Report and accounts of the Reserve Bank for the accounting year 2022-23. The Board approved the transfer of Rs 87,416 crore as surplus to the Central Government for the accounting year 2022-23, while deciding to keep the contingency risk buffer at 6 per cent,” the statement added.
Economists said the higher surplus transfer was mainly due to sale of foreign exchange reserves. However, since RBI has a large investment in US treasuries, sharp rise in yields have dented profits.
“Gains from record gross foreign exchange sales in fiscal year 2022-23 would be the major driver of bumper surplus, albeit with profits being partly offset by higher provisioning on MTM losses on foreign securities. Besides, a higher contingency buffer of 6 per cent of balance sheet vs 5.5 per cent in the past, also ate into the profits,” said Madhavi Arora, lead economist, Emkay Global.
Emkay estimated around $206 dollar sales by RBI till February 2023. The sale were mostly in June-December period when the rupee was on average around Rs 80.6/$ as compared to its historical acquisition price of Rs 64/65 a dollar.
“The dividend could bring in additional revenue of around 0.2 per cent of GDP, which could partly offset possible losses amid lower tax revenues, divestment, etc,” Arora said while adding the surplus was in line with their expectation.
The Union budget of this year estimated the dividends from the central bank, public sector banks and financial institutions at Rs 48,000 crore.
Apart from RBI governor and the four deputy governors, other directors of the central board including Satish Marathe, Revathy Iyer, Sachin Chaturvedi, Anand Mahindra, Pankaj Patel and Ravindra Dholakia attended the meeting. Ajay Seth, Secretary, Department of Economic Affairs also attended the meeting, the RBI statement said.
For more latest Economy News Click Here
Denial of responsibility! FineRadar is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.