Reserve Bank's surplus rises 67% to Rs 25,000 crore

It may be crunch time for the economy but the Reserve Bank of India (RBI) has seen its profit soaring by 67% to Rs 25,000 crore in 2008-09.

On Thursday, RBI said it would pay a surplus profit of Rs 25,009 crore to the government for the year ended June 30, 2009. Last year, the RBI had transferred Rs 15,011 crore for the year ended June 30 , 2008.

During the board meeting, held on Thursday, the central bank approved the dividend amount to be paid to the government. An official with the RBI noted that the components of the surplus profit paid to the government are being worked out.

"This year, we estimate a large portion of the government securities transactions as a large part of the surplus transferred. The interest income should happen mainly from the daily LAF operations and discounting of treasury bills," he said.

According to the annual report for 2007-08, the surplus transferred to the government for the year, which amounted to Rs 15,011 crore, included Rs 1,699 crore towards the interest differential on special securities converted into marketable securities for compensating the government for the difference in interest expenditure which the government had to bear consequent on conversion of such special securities.

The income from domestic sources in 2007-08 stood at Rs 5,867.52 crore. Interest on domestic securities, dividend and interest on LAF operations which together decreased from Rs 5,234.58 crore in 2006-07 to Rs 4,533.87 crore in 2007-08 and depreciation on securities increased from Rs 5,570.03 crore to Rs 7,048.06 crore.

In the year 2006-07, the Reserve Bank of India had transferred Rs 45,719 crore as a surplus to the government which included Rs 34,308.60 crore on account of profit on sale of SBI (SBI : 1797.6 +94.85) shares held by the central bank. Excluding this amount, the transfer of surplus for the year ended June 30, 2007 stood at Rs 11,411 crore.

This surplus, which was transferred to the government , included Rs 1,914 crore towards interest differential on special securities converted into marketable securities, intended to compensate the government for the difference in interest expenditure which the government had to bear consequent on the conversion of special securities and Rs 34,308.60 crore pertaining to profit on sale of SBI shares held by RBI to the government.