Reserve Bank of India's balance sheet returns to pre-pandemic levels

New Delhi: The Reserve Bank of India (RBI) witnessed an 11.08 percent year-on-year increase in its balance sheet, reaching Rs 70.47 trillion as of March 31, 2024 (FY24). This marks a significant uptick from Rs 63.44 trillion recorded a year earlier.

According to reports, the upturn has been boosted by liquidity and foreign exchange operations. According to the RBI's annual report for FY24, the balance sheet's size expanded to 24.1 percent of gross domestic product (GDP) by the end of March 2024, up from 23.5 percent at the same time in 2023, effectively returning to its pre-pandemic level.

The central bank's income also saw a substantial uptick, soaring by 17.04 percent year-on-year to Rs 2.75 trillion, primarily driven by profits generated from foreign exchange sales. In contrast, expenditure witnessed a significant decline of 56.29 percent year-on-year, amounting to Rs 64,694.33 crore. 

Notably, a provision of Rs 42,819.91 crore was allocated to the contingency fund (CF) to safeguard against risks arising from monetary and forex operations, bolstering the fund's balance.

The contingency risk buffer now stands at 6.5 percent of the balance sheet as of March 2024, up from 6 percent in the previous year, aligning with the norm of maintaining a risk buffer between 5.5 percent and 6.5 percent. The CF balance reached Rs 4,28,621.03 crore by March 31, 2024, compared to Rs 3,51,205.69 crore in the previous fiscal year.

Moreover, the surplus transferred to the central government surged to Rs 2.10 trillion in FY24, a substantial increase from Rs 87,416.22 crore in FY23.

The increase in the asset side of the balance sheet was attributed to rises in foreign investments (13.90%), gold holdings (18.26%), and loans and advances (30.05%). On the liability side, expansions were noted in notes issued (3.88%), deposits (27.0%), and other liabilities (92.57%).

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