Mumbai: The Reserve Bank of India’s contingency fund that takes care of unforeseen emergencies has depleted to Rs 1.96 lakh crore as of June 30 after it transferred Rs 52,000 crore excess payout to the government, according to its Annual Report for FY19 released on Thursday. This week, the RBI had announ-ced the highest ever dividend transfer of Rs 1.76 lakh crore to the government. The dividend comprised Rs 1.23 lakh crore of annual dividend for 2018-19 and Rs 52,637 crore from its surplus capital identified by a revised economic capital framework.
“After the payout to the government, the balance in the contingency fund as of June 30, 2019 was Rs 1,96,344 lakh crore compared to Rs 2,32,108 lakh crore as of June 30, 2018,” said the RBI Annual Report 2018-19. The transfer from its surplus reserves followed recommendation from a panel named by the RBI. The high-level panel, under former Governor Bimal Jalan, was formed to recommend ways to utilise the RBI’s excess cash reserves and its part transfer to the government.
The RBI said as of June 30 it “stands as a central bank with one of the highest levels of financial resilience globally”.
There are three kinds of reserves in the RBI’s balance sheet. These are: valuation reserves for dealing with volatility in foreign exchange holdings and government securities; asset development reserves for taking care of depreciation and other asset-related costs; and a contingency reserve to take care of any unforeseen emergencies.
The annual report said that the RBI computed exchange gains/losses using the weighted average cost method resulting in an impact of Rs 21,464 crore. It also said income from domestic sources increased 132.07 per cent to Rs 1,18,078 crore from Rs 50,880 crore in the previous fiscal, due to a rise in the portfolio of rupee securities, net income on interest under liquidity adjustment facility and also write back of excess risk provision from the contingency fund.
