Mumbai, Aug. 8: The Reserve Bank of India today said it would transfer a surplus profit of over Rs 33,000 crore to the government.
“The Reserve Bank’s central board, at its meeting held today, approved the transfer of surplus profit to the Government of India amounting to Rs 33,010 crore for the year ended June 30,” a statement from the central bank said.
Last year, the apex bank had paid a surplus of Rs 16,010 crore. The RBI follows the July-June accounting year.
The amount is likely to bring some relief to the government, which plans to bring down the fiscal deficit to 4.8 per cent of the gross domestic product (GDP) this year.
The Reserve Bank’s income comprises earnings from foreign and domestic sources. A major portion is contributed by interest receipts. The earnings from foreign sources come from the deployment of foreign currency assets and gold. India’s apex bank usually deploys part of its assets with other central banks and the International Monetary Fund (IMF).
On the domestic front, the RBI earns coupon receipts on its portfolio of government securities, which increases if it conducts large-scale open market operations. It also earns profit on sale of securities.
The apex bank receives interest income from the union and state governments on ways and means advances/overdraft.
Ways and means advance is a mechanism used by the RBI under its credit policy to help states tide over temporary mismatches in the cash flow of their receipts and payments.
Its expenditure consists of establishment expenses, agency charges/commission and security printing charges arising out of statutory functions.
Section 47 of the RBI Act stipulates that after making provisions for contingencies and corpus funds as defined therein, the balance profit of the Reserve Bank is to be transferred to the government.
In terms of section 48 of the RBI Act, the Reserve Bank is exempted from paying any income tax or super-tax.
While the RBI is yet to come out with its annual report for 2012-13, the higher surplus transferred to the government indicates that the central bank witnessed a rise in its earnings from its domestic operations.