The balance sheet size of the Reserve Bank increased by about 10 per cent during the year ending June 30,
2014. This was mainly due to the expansion of the foreign currency assets, which increased by about 15 per cent.
Gross income of `646.17 billion for the year 2013-14 registered a fall of 13.10 per cent over 2012-13, while
total expenditure fell by 4.9 per cent from `125.49 billion to `119.34 billion. The year ended with an overall
surplus of `526.79 billion, representing a decrease of 14.75 per cent over the previous year. The entire surplus was
transferred to the government, making it the largest ever transfer by the Reserve Bank.
XII.1 The balance sheet of the Reserve Bank is
largely a reflection of the activities that is carried
out in pursuing its currency issue function and its
monetary and reserve management policy
objectives. In recognition of the need for greater
comparability and transparency, the Reserve Bank
has been progressively moving towards greater
disclosures in its financial statements. Accordingly,
the key financial results of the Reserve Bank’s
operations during 2013-14 along with the supporting
notes to the accounts and statement of significant
accounting policies are set out in the following
paragraphs.
XII.2 The year 2013-14 witnessed an overall
increase in the size of the balance sheet by `2,337
billion, i.e., 9.8 per cent from `23,907 billion as on
June 30, 2013 to `26,244 billion as on June 30,
2014. The increase in the asset side was mainly
due to increase in foreign currency assets (FCA),
impact of depreciation of the US dollar against
other major currencies in which the Reserve Bank’s
FCA are held and depreciation of the rupee against
the US dollar adjusted for fall in the value of gold
reserves on the asset side. The increase in the
liabilities side was mainly due to a rise in currency
in circulation and accretion to the Currency and
Gold Revaluation Account (CGRA). At the close of
the year, the domestic assets constituted 33.0 per
cent of total assets while the foreign assets
constituted the remaining 67.0 per cent as against
36.2 per cent and 63.8 per cent, respectively as
on June 30, 2013.
XII.3 A Technical Committee constituted in 2012-
13 to review the form of presentation of the Balance
Sheet and Profit & Loss Account [Chairman: Shri
Y. H. Malegam (Technical Committee I)] observed
that the existing policies relating to reserves,
provisioning and accounting norms needed to be
examined in detail. As a follow up, another
Technical Committee [Chairman: Shri Y. H.
Malegam (Technical Committee II)] was constituted
during 2013-14 to review the level and adequacy
of internal reserves and surplus distribution policy
of the Reserve Bank of India. Based on the detailed
studies, the Technical Committee II recommended
that since the balances in the Contingency Reserve
(CR) and the Asset Development Reserve (ADR)
are currently in excess of the buffers needed, there
was no need to make any further transfers to CR
and ADR. Accordingly, no transfers have been
made to CR and ADR this year, and the entire
surplus of `526.79 billion was transferred to the
Central Government making it the largest ever
surplus transfer by the Reserve Bank. The
Technical Committee-I had made several
recommendations relating to the format and
contents of the Balance Sheet and Profit & Loss
Account of the Reserve Bank. These
recommendations covered the manner of reporting
of items in the balance sheet, generation of a single
balance sheet for Issue and Banking Departments,
depiction of each balance sheet head in a single
line supported by detailed schedules (instead of
the present practice of reporting only some items with detailed breakups in the balance sheet while
explaining composition of other items in the
accounts chapter), reclassification and grouping
of certain items with a view to having better
presentation of all material items in the financial
statements. The Board of the Bank has accepted
these recommendations for implementation in the
year 2014-15. The merger of the Balance Sheets
is dependent on the notification by the Central
Government; this will be taken forward with the
Central Government. Amendments to the format
of the Profit & Loss Account would entail
amendments to Regulation 22 of the Reserve Bank
of India General Regulations, 1949; hence these
would be implemented in the year 2014-15 after
the revised Balance Sheet format is notified by the
Central Government and the revised regulations
are approved by the Central Board and notified by
the Central Government.
XII.4 The major recommendations of the
Technical Committee II include (a) changes in the
method of revaluation of the rupee securities from
the Lower of Book and Market Value (LOBOM) to
fair valuation and (b) accounting for foreign
exchange forward contracts. The recommendations
also elucidate the various risks and the buffers
required to take care of the risks arising out of
future appreciation in the exchange value of the
rupee, future depreciation in the market price of
gold and market value of investments in foreign
securities, operational & systemic risks, buffers
required for further capital expenditure and
investment in subsidiaries & associated enterprises.
The recommendations also outline the approach
to be followed for transfer of surplus to the
Government.
XII.5 The Balance Sheet and the Profit and Loss
Account for the year 2013-14 are as under.
RESERVE BANK OF INDIA
BALANCE SHEET AS AT 30th JUNE 2014
ISSUE DEPARTMENT |
(` thousands) |
2012-13 |
LIABILITIES |
2013-14 |
2012-13 |
ASSETS |
2013-14 |
|
Notes held in the |
|
|
Gold Coin and Bullion: |
|
80,169 |
Banking Department |
110,271 |
674,316,432 |
(a) Held in India |
649,775,377 |
12016,157,427 |
Notes in Circulation |
13445,160,518 |
– |
(b) Held outside India |
– |
|
|
|
11329,100,584 |
Foreign Securities |
12783,310,039 |
12016,237,596 |
Total Notes Issued |
13445,270,789 |
12003,417,016 |
Total |
13433,085,416 |
|
|
|
2,356,280 |
Rupee Coin |
1,721,073 |
|
|
|
10,464,300 |
Government of India Rupee Securities |
10,464,300 |
|
|
|
– |
Internal Bills of Exchange and other Commercial Paper |
– |
12016,237,596 |
Total Liabilities |
13445,270,789 |
12016,237,596 |
Total Assets |
13445,270,789 |
BANKING DEPARTMENT |
(` thousands) |
2012-13 |
LIABILITIES |
2013-14 |
2012-13 |
ASSETS |
2013-14 |
50,000 |
Capital paid-up |
50,000 |
80,169 |
Notes |
110,271 |
65,000,000 |
Reserve Fund |
65,000,000 |
296 |
Rupee Coin |
209 |
220,000 |
National Industrial Credit |
230,000 |
63 |
Small Coin |
73 |
|
(Long Term Operations) Fund |
|
|
|
|
1,960,000 |
National Housing Credit |
1,970,000 |
|
Bills Purchased and Discounted : |
|
|
(Long Term Operations) Fund |
|
- |
(a) Internal |
- |
|
|
|
- |
(b) External |
- |
|
|
|
- |
(c) Government Treasury Bills |
- |
|
Deposits |
|
|
|
|
|
(a) Government |
|
3395,014,738 |
Balances Held Abroad |
3726,756,685 |
1,002,895 |
(i) Central Government |
1,000,207 |
|
|
|
424,847 |
(ii) State Governments |
424,661 |
|
|
|
|
(b) Banks |
|
7276,101,007 |
Investments |
7767,331,027 |
3391,427,816 |
(i) Scheduled Commercial Banks |
3469,155,998 |
|
|
|
32,038,844 |
(ii) Scheduled State Co-operative Banks |
37,292,739 |
|
Loans and Advances to : |
|
55,210,206 |
(iii) Other Scheduled Co-operative Banks |
63,307,042 |
146,610,000 |
(i) Central Government |
- |
2,241,459 |
(iv) Non-Scheduled State Co-operative Banks |
4,807,554 |
21,449,487 |
(ii) State Governments |
6,656,600 |
90,595,353 |
(v) Other Banks |
102,670,889 |
|
Loans and Advances to: |
|
165,973,592 |
(c) Others |
213,885,518 |
187,170,300 |
(i) Scheduled Commercial Banks |
294,173,000 |
|
|
|
– |
(ii) Scheduled State Co-operative Banks |
- |
|
|
|
1,650,000 |
(iii) Other Scheduled Co-operative Banks |
1,337,500 |
1,873,179 |
Bills Payable |
373,489 |
– |
(iv) Non-Scheduled State Co-operative Banks |
- |
|
|
|
– |
(v) NABARD |
- |
|
|
|
8,236,648 |
(vi) Others |
68,662,500 |
|
|
|
|
Loans, Advances and Investments from National Industrial Credit (Long Term Operations) Fund: |
|
|
|
|
|
(a) Loans and Advances to: |
|
|
|
|
– |
(i) Industrial Development Bank of India |
– |
|
|
|
– |
(ii) Export Import Bank of India |
– |
8082,855,793 |
Other Liabilities |
8838,232,625 |
– |
(iii) Industrial Investment Bank of India Ltd. |
– |
|
|
|
– |
(iv) Others |
– |
|
|
|
|
(b) Investments in bonds/ debentures issued by: |
|
|
|
|
– |
(i) Industrial Development Bank of India |
– |
|
|
|
– |
(ii) Export Import Bank of India |
– |
|
|
|
– |
(iii) Industrial Investment Bank of India Ltd. |
– |
|
|
|
– |
(iv) Others |
– |
|
|
|
|
Loans, Advances and Investments from National |
|
|
|
|
|
Housing Credit (Long Term Operations) Fund: |
|
|
|
|
– |
(a) Loans and Advances to National Housing Bank |
– |
|
|
|
– |
(b) Investments in bonds/debentures issued by |
– |
|
|
|
|
National Housing Bank |
|
|
|
|
854,561,276 |
Other Assets |
933,372,857 |
11890,873,984 |
Total Liabilities |
12798,400,722 |
11890,873,984 |
Total Assets |
12798,400,722 |
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30th JUNE 2014 |
(` thousands) |
2012-13 |
INCOME |
|
2013-14 |
455,635,749 |
Interest, Discount, Exchange, Commission, etc. |
|
646,169,713 |
455,635,749 |
Total |
|
646,169,713 |
|
EXPENDITURE |
|
|
25,725 |
Interest |
|
35,690 |
58,595,877 |
Establishment |
|
43,244,344 |
30,613 |
Directors’ and Local Board Members’ Fees and Expenses |
|
30,963 |
640,702 |
Remittance of Treasure |
|
712,554 |
28,066,536 |
Agency Charges |
|
33,254,472 |
28,724,406 |
Security Printing (Cheques, Note forms, etc.) |
|
32,135,816 |
228,203 |
Printing and Stationery |
|
209,279 |
818,627 |
Postage and Telecommunication Charges |
|
839,866 |
1,503,660 |
Rent, Taxes, Insurance, Lighting, etc. |
|
1,223,092 |
30,139 |
Auditors’ Fees and Expenses |
|
24,221 |
36,316 |
Law Charges |
|
45,594 |
2,390,152 |
Depreciation and Repairs to Bank’s Property |
|
2,658,472 |
4,404,794 |
Miscellaneous Expenses |
|
4,924,898 |
125,495,750 |
Total |
|
119,339,261 |
330,140,000 |
Available Balance |
|
526,830,452 |
|
Less: Contribution to: |
|
|
|
National Industrial Credit (Long Term Operations) Fund |
10,000 |
|
|
National Rural Credit (Long Term Operations) Fund1 |
10,000 |
|
|
National Rural Credit (Stabilisation) Fund1 |
10,000 |
|
|
National Housing Credit (Long Term Operations) Fund |
10,000 |
|
40,000 |
|
|
40,000 |
330,100,000 |
Surplus payable to the Central Government |
|
526,790,452 |
1. These funds are maintained by the National Bank for Agriculture and Rural Development (NABARD). |
S. Ganesh Kumar
Chief General Manager |
S. S. Mundra
Deputy Governor |
R. Gandhi
Deputy Governor |
Urjit R. Patel
Deputy Governor |
Harun R. Khan
Deputy Governor |
Raghuram G. Rajan
Governor |
INDEPENDENT AUDITORS’ REPORT
TO THE PRESIDENT OF INDIA
Report on the Financial Statements
We, the undersigned Auditors of the Reserve Bank of India (hereinafter referred to as the “Bank”), do hereby report to the Central Government upon the Balance Sheet of the Bank as at June 30, 2014 and the Profit
& Loss Account for the year ended on that date (hereinafter referred to as “financial statements”), which have been audited by us.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and correct view of the state of affairs and results of operations of the Bank in accordance with the requirements of the
provisions of the Reserve Bank of India Act, 1934 and Regulations framed thereunder and the accounting policies and practices consistently followed by the Bank. This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and correct view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Bank’s preparation and correct
presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to explanations given to us and as shown by the books of account of the Bank, the Balance Sheet read with Significant Accounting Policies is a full and
fair Balance Sheet containing all necessary particulars and is properly drawn up in accordance with the requirements of the provisions of the Reserve Bank of India Act, 1934 and Regulations framed there under so
as to exhibit true and correct view of the state of affairs of the Bank
Other Matters
We report that we have called for information and explanation from the Bank which was necessary for the purpose of our audit and such information and explanation have been given to our satisfaction.
We also report that the financial statements include the accounts of eighteen Accounting Units of the Bank which have been audited by Statutory Branch Auditors and we have relied on their report in this regard.
For Haribhakti & Co., LLP
Chartered Accountants
(ICAI Firm Registration No. 103523W) |
For CNK & Associates, LLP
Chartered Accountants
(ICAI Firm Registration No. 101961W) |
Dilip B. Desai
Partner
Membership No.300-53078 |
Gautam Nayak
Partner
Membership No. 38127 |
Place: New Delhi
Date: August 10, 2014
STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES FOR THE YEAR ENDED JUNE 30,
2014
1. General
1.1 The Reserve Bank of India was established
under the Reserve Bank of India Act, 1934 ( the
Act) “to regulate the issues of Bank notes and the
keeping of reserves with a view to securing
monetary stability in India and generally to operate
the currency and credit system of the country to
its advantage”.
1.2 The main functions of the Bank are:-
a) Issue of Bank notes.
b) Management of the monetary system.
c) Regulation and supervision of banks and Non
–Banking Finance Companies (NBFCs).
d) Acting as a lender of the last resort.
e) Regulation and supervision of the Payment
and Settlement Systems.
f) Maintaining and managing the country’s
foreign exchange reserves.
g) Acting as a banker to the banks and the
Governments.
h) Acting as the manager of the debt of the
Governments.
i) Regulation and development of foreign
exchange market.
j) Developmental functions including in the areas
of rural credit and financial inclusion.
The Act requires that the issue of Bank notes
should be conducted by the Bank in an Issue
Department which shall be separate and kept
wholly distinct from the Banking Department
and the assets of the Issue Department shall
not be subject to any liability other than the
liabilities of the Issue Department. The Act
requires that the assets of the Issue
Department shall consist of gold coins, gold bullions, foreign securities, rupee coins and
rupee securities to such aggregate amount
as is not less than the total of the liabilities of
the Issue Department. The Act requires that
the liabilities of the Issue Department shall be
an amount equal to the total of the amount of
the currency notes of the Government of India
and Bank notes for the time being in circulation.
2. Significant Accounting Policies
I. Convention
The financial statements are prepared in
accordance with the Reserve Bank of India Act,
1934 and the notifications issued thereunder and
in the form prescribed by the Reserve Bank of India
General Regulations, 1949 and are based on
historical cost except where it is modified to reflect
revaluation.
The accounting practices and policies followed in
the financial statements are consistent with those
followed in the previous year unless otherwise
stated.
II. Revenue Recognition
Income and expenditure are recognised on accrual
basis except dividend, which is accounted for on
receipt basis and penal interest that is accounted
for only when there is certainty of realisation. Only
realised gains are recognised.
Balances unclaimed and outstanding for more than
three clear consecutive years in certain transit
accounts including Drafts Payable Account,
Payment Orders Account, Sundry Deposits
Account, Remittance Clearance Account and
Earnest Money Deposit Account are reviewed and
written back to income. Claims in this respect are
considered and charged against income in the year
of payment.
Income and expenditure in foreign currency are
recorded at the exchange rates prevailing on the
last business day of the week/month/ year as
applicable.
III. Gold & Foreign Currency Assets and
Liabilities
Transactions in gold and foreign currency assets
and liabilities are accounted for on settlement date
basis.
a) Gold
Gold is revalued on the last business day of the
month at 90 per cent of the daily average price
quoted by London Bullion Market Association for
the month. The rupee equivalent is determined on
the basis of the exchange rate prevailing on the
last business day of the month. Unrealised gains/
losses are credited/debited to the Currency and
Gold Revaluation Account (CGRA).
b) Foreign Currency Assets and Liabilities
All foreign currency assets and liabilities (excluding
foreign currency received under the swaps that are
in the nature of repos) are translated at the
exchange rates prevailing on the last business day
of the week, month and the year, except in cases
where rates are contractually fixed. Exchange
gains and losses arising from such translation of
foreign currency assets and liabilities are accounted
for in CGRA and remain adjusted therein.
Foreign securities, other than Treasury Bills, are
marked to market as on the last business day of
each month except certain “held to maturity”
securities, which are valued at cost. Appreciation
or depreciation, if any, is recorded in the Investment
Revaluation Account (IRA). Credit balance in IRA
is carried forward to the subsequent year. Debit
balance, if any, at the end of the year in IRA is
charged to the Profit and Loss Account and the
same is reversed to the credit of the Profit & Loss
Account on the first working day of the succeeding
financial year.
Foreign Treasury Bills and Commercial Papers are
carried at cost as adjusted by amortisation of
discount. Premium or discount on foreign securities
is amortised daily. Profit/loss on sale of foreign currency assets is recognised with respect to the
book value. In the case of Foreign Treasury Bills,
Commercial Papers and Foreign Securities, profit
& loss is recognised with reference to the amortised
cost. Further, on sale/redemption of foreign dated
securities, valuation gain/loss in relation to the
securities sold, lying in IRA, is transferred to the
Profit & Loss Account.
c) Forward/Swap Contracts
The accounting policy for forward contracts has
undergone a change during the year as suggested
by Technical Committee II. Accordingly, forward
contracts entered into by the Bank as part of its
intervention operations are, from this year onwards,
revalued on a yearly basis (on June 30). While MTM
gain is to be credited to the ‘Foreign Exchange
Forward Contracts Valuation Account’ (FCVA), a
balance sheet head, with contra debit to Revaluation
of Forward Contracts Account (RFCA), MTM loss
would be debited to the FCVA with contra credit to
the Provision for Forward Contracts Valuation
Account (PFCVA). On maturity of the contract, the
actual gain or loss would be recognised in the Profit
& Loss account and the unrealised gains/losses
previously recorded in the FCVA, RFCA and
PFCVA would be reversed. While the balance in
the RFCA represents the net unrealised gain on
valuation of forward contracts entered into as part
of intervention operations, the balance in the
PFCVA represents the net unrealised loss on
valuation of such contracts.
In the case of swaps at off-market rates that are in
the nature of repo, the difference between the
future contract rate and the rate at which the
contract is entered into is amortised over the period
of the contract and recorded in the Profit & Loss
account with contra to Swap Amortisation Account.
Further, the amounts received under these swap
are not subject to periodic revaluation.
While FCVA and PFCVA form part of “Other
Liabilities”, RFCA forms part of “Other Assets”.
IV. Rupee Securities
Rupee securities, other than Treasury Bills, held
in the Issue and Banking Departments, are valued
at lower of book value or market price (LOBOM).
Where the market price for such securities is not
available, the rates are derived based on the yield
curve prevailing on the last business day of the
month as notified by the Fixed Income Money
Market and Derivatives Association of India
(FIMMDA). Depreciation in value, if any, is adjusted
against current interest income.
Treasury Bills are valued at cost.
Securities received as collateral under Repurchase
Agreement (Repo) and Marginal Standing Facility
(MSF) are held in the Reserve Bank’s books at
face value.
V. Shares
Investments in shares are valued at cost.
VI. Fixed Assets
Fixed Assets are stated at cost less depreciation.
Depreciation on computers, microprocessors,
software (costing `0.1 million and above), motor
vehicles, furniture, etc., is provided on straight-line
basis at the following rates.
Asset Category |
Rate of depreciation |
Motor vehicles, furniture, etc. |
20 per cent |
Computers, Microprocessors, Software, etc. |
33.33 per cent |
Amortisation of premium on leasehold land and
depreciation on building is provided on writtendown
value basis at the following rates.
Asset Category |
Rate of depreciation/
amortisation |
Leasehold Land and Building(s)
constructed thereon |
Proportionate to lease
period but not less
than 5 per cent |
Building(s) constructed on Freehold Land |
10 per cent |
Fixed Assets, costing less than `1,00,000 (except
easily portable electronic assets) are charged to
the Profit and Loss Account in the year of
acquisition.
Valuable but easily portable electronic assets, such
as, laptops, etc. costing more than `10,000 are
capitalised.
Individual items of computer software costing
`1,00,000/- and above are capitalised and
depreciation is calculated at the applicable rates.
Depreciation is provided on year-end balances of
the Fixed Assets.
VII. Employee Benefits
The liability on account of long term employee
benefits is provided based on an actuarial valuation
under the ‘Projected Unit Credit’ method.
NOTES TO THE ACCOUNTS
Basis of preparation
XII.6 The financial statements of the Reserve
Bank are prepared in accordance with the Reserve
Bank of India (RBI) Act, 1934 and the notifications
issued there under and in the form prescribed by
the Reserve Bank of India General Regulations,
1949. As per the current practice, Reserve Bank
prepares two balance sheets, one for the Issue
Department relating exclusively to its currency
management responsibility and the other for the
Banking Department reflecting the impact of all
other functions of the Reserve Bank.
Liabilities and Assets of the Issue Department
Issue Department – Liabilities
XII.7 The liabilities of the Issue Department
reflect the quantum of currency notes in circulation.
Section 34(1) of the Reserve Bank of India Act
requires that all bank notes issued by the Reserve
Bank since April 1, 1935 and the currency notes
issued by the Government of India before the commencement of operations of the Reserve
Bank, be part of the liabilities of the Issue
Department. The currency notes in circulation
increased by 11.9 per cent during 2013-14 to
`13,445.16 billion as compared with an increase
of 8.9 per cent during 2012-13 and 13.8 per cent
in 2011-12.
Issue Department – Assets
XII.8 The eligible assets of the Issue Department
for backing its currency liabilities consist of gold
(coins and bullion), foreign securities, rupee coin,
Government of India securities (which remained
unchanged at `10.46 billion), internal bills of
exchange and other commercial papers. The
Reserve Bank holds 557.75 metric tonnes of gold
of which 292.26 metric tonnes are held as an asset
of the Issue Department and the balance 265.49
metric tonnes is treated as part of the other assets
of the Banking Department. The value of gold held
in the Issue Department decreased by 3.6 per cent
from `674.31 billion as on June 30, 2013 to `649.78
billion as on June 30, 2014, reflecting declining
international bullion prices (Table XII.1). Consequent
upon an increase in the total liabilities of the Issue
Department, there was an increase in the
supporting assets held in the form of foreign
securities from `11,329.10 billion as on June 30,
2013 to `12,783.31 billion as on June 30, 2014.
The value of Rupee coins of the Issue Department
decreased from `2.36 billion as on June 30, 2013 to `1.72 billion as on June 30, 2014, registering a
decrease of 27.1 per cent. There was no change
in the holding of the Government of India Rupee
securities which remained at `10.46 billion.
Table XII.1: Holding of Gold |
|
As on
June 30, 2013 |
As on
June 30, 2014 |
Value in
` billion |
Volume
in metric
tonnes |
Value in
` billion |
Volume
in metric
tonnes |
1 |
2 |
3 |
4 |
5 |
Gold held in Issue Department |
674.31 |
292.26 |
649.78 |
292.26 |
Gold held in Banking Department (under ‘Other Assets’) |
612.54 |
265.49 |
590.24 |
265.49 |
Total |
1,286.85 |
557.75 |
1,240.02 |
557.75 |
Liabilities and Assets of the Banking Department
Banking Department – Liabilities
i) Capital
The Reserve Bank was constituted as a
private shareholders’ bank in 1935 with an
initial paid-up capital of `0.05 billion. The bank
was nationalised with effect from January 1,
1949 and its entire ownership remains vested
in the Government of India. The paid-up
capital continues to be `0.05 billion as per
section 4 of the RBI Act.
ii) Reserve Fund
The original Reserve Fund of `0.05 billion was
created in terms of section 46 of the Reserve
Bank of India Act as contribution from the
Central Government for the currency liability
of the then sovereign government taken over
by the Reserve Bank. Thereafter, an amount
of `64.95 billion was credited to this Fund from
out of gains on periodic revaluation of gold up
to October 1990, taking it to `65 billion. The
accumulation in the fund has been static since
then and gain/loss on account of valuation of
gold and foreign currency is booked in the
Currency and Gold Revaluation Account
(CGRA) which is part of the head ‘Other
Liabilities’ in the balance sheet.
iii) National Industrial Credit (Long Term
Operations) Fund
Created in July 1964, under section 46C of
the RBI Act with an initial corpus of `100
million, the fund witnessed annual contribution
from the Reserve Bank for financial assistance
to eligible financial institutions. Since 1992-93,
a token amount of `10 million is being
contributed each year to the Fund from the
Bank’s income; the same practice has been followed for the year 2013-14 as well and the
balance in the fund stood at `230 million as
on June 30, 2014.
iv) National Housing Credit (Long Term
Operations) Fund
Set up in January 1989 under section 46D of
the RBI Act for extending financial
accommodation to the National Housing Bank,
the initial corpus of `500 million has been
enhanced by annual contributions from the
Reserve Bank thereafter. From the year 1992-
93, only a token amount of `10 million is
contributed each year from the Profit & Loss
Account (Income Statement) to the Fund.The
balance in the fund stood at `1,970 million as
on June 30, 2014.
v) Contribution to other Funds
It may be noted that there are two other Funds
constituted under section 46A of the RBI Act,
viz., National Rural Credit (Long Term
Operations) Fund and National Rural Credit
(Stabilisation) Fund for which a token
contribution of `10 million each is made every
year to the National Bank for Agriculture and
Rural Development (NABARD).
vi) Deposits
These represent the cash balances maintained
with the Reserve Bank by the Central and
State Governments, banks, All India financial
institutions, such as, Export Import Bank
(EXIM Bank) and NABARD, foreign central
banks, international financial institutions,
balance in different accounts relating to the
Employees’ Provident Fund, Gratuity and
Superannuation Funds and balance in the
newly established Depositor Education and
Awareness Fund (DEA Fund).This Fund was
created during the year for promotion of
depositors’ interest and for such other
purposes which may be necessary for the
promotion of depositors’ interests as specified by the Reserve Bank from time to time.
The balance in the DEA Fund was `27.95
billion as on June 30, 2014. Total deposits
stood at `3,892.54 billion as on June 30,
2014 as compared with `3,738.92 billion as
on June 30, 2013, registering an increase of
4.1 per cent.
• Deposits – Government
The Reserve Bank acts as banker to the
Central Government in terms of sections 20
and 21 and as banker to the State Governments
by mutual agreement in terms of section 21(A)
of the Reserve Bank of India Act. Accordingly,
the Central and the State Governments
maintain deposits with the Reserve Bank. The
year-end closing balances of deposits
maintained by the Central and State
Governments at `1.00 billion and `0.42 billion
respectively totalling `1.42 billion were at
almost the same level as at the end of the
previous year.
• Deposits – Banks
Banks maintain balances in their current
accounts with the Reserve Bank to provide
for the Cash Reserve Ratio (CRR) requirements
and for working funds to meet payment and
settlement obligations. The total bank deposits
as on June 30, 2014 stood at `3,677.24 billion
as compared with `3,571.51 billion as on June
30, 2013, registering an increase of 3.0 per
cent during the year.
• Deposits - Others
There was an overall increase of 28.9 per cent
in other deposits during the year 2013-14,
mainly on account of higher accumulated
retirement benefits and newly established
DEA Fund. The details are given in the
Table XII.2.
vii) Bills Payable
The Reserve Bank provides remittance
facilities for its constituents and also meets its
own payment requirements through issue of Demand Drafts (DDs) and Payment Orders
(POs) (besides electronic payments
mechanisms). The balance under this head
represents the un-encashed DDs/ POs and
remittances under the erstwhile Remittance
Facility Scheme, 1975. The total amount
outstanding under this head decreased from
`1.87 billion as on June 30, 2013 to `0.37
billion as on June 30, 2014 mainly due to
reduction in remittance of funds through DD/
POs reflecting the growing popularity of
electronic modes of payment.
Table XII.2: Deposits –Others |
(` billion) |
Particulars |
As on June 30 |
2013 |
2014 |
1 |
2 |
3 |
I. Rupee Deposits from the Foreign Central Banks and the Foreign Financial Institutions |
15.33 |
11.56 |
II. Deposits from the Indian Financial Institutions |
0.70 |
2.53 |
III. Deposits placed by Mutual Funds |
0.02 |
0.01 |
IV. Accumulated Retirement Benefits (i+ii) |
141.02 |
161.72 |
(i) Provident Fund |
36.10 |
38.62 |
(ii) Gratuity and Superannuation Fund |
104.92 |
123.10 |
V. Depositor Education and Awareness (DEA) Fund |
0.00 |
27.95 |
VI. Miscellaneous |
8.90 |
10.11 |
Total |
165.97 |
213.88 |
viii) Other Liabilities
The major components of ‘other liabilities’
are internal reserves and provisions. While CR
and ADR are created from the Bank’s realised
profit, the remaining components of ‘Other
Liabilities’, such as, CGRA, Investment
Revaluation Account (IRA) and Foreign
Exchange Forward Contracts Valuation
Account (FCVA) [previously Exchange
Equalisation Account (EEA)] represent
unrealised gains/losses. Other Liabilities
increased from `8,082.86 billion as on June
30, 2013 to `8,838.23 billion as on June 30,
2014, reflecting a rise of 9.3 per cent mainly
on account of accretion to the CGRA (Table
XII.3).
a) Contingency Reserve (CR)
It represents the amount set aside on a year-to-
year basis for meeting unexpected and
unforeseen contingencies, including
depreciation in the value of securities, and
risks arising out of monetary/exchange rate
policy operations, systemic risks and any risk
arising on account of the special responsibilities
enjoined upon the Bank.
b) Asset Development Reserve (ADR)
The Asset Development Reserve, created in
1997-98, represents the amounts provided
out of profits each year to meet internal capital
expenditure and make investments in
subsidiaries and associated institutions.
Transfers to Contingency Reserve and
Asset Development Reserve
As against the target of 12 per cent of
total assets set for CR and the ADR
together based on the recommendations of
an Internal Study Group (Chairman: Shri V.
Subrahmanyam) (1997), the CR and the ADR
together constituted 9.2 per cent of the total
assets of the Reserve Bank as on June 30,
2014; the position as at the end of the last
five years is given in Table XII.4 . Following the recommendations of the Technical Committee
II, no transfers to CR and ADR have been
made for the year ended June 30, 2014.
Table XII.3: Details of Other Liabilities |
(` billion) |
Particulars |
As on June 30 |
2013 |
2014 |
1 |
2 |
3 |
a. Contingency Reserve |
|
|
Balance at the beginning of the year |
1,954.05 |
2,216.52 |
Add: Accretion during the year |
262.47 |
0.00 |
Balance at the end of the year |
2,216.52 |
2,216.52 |
b. Asset Development Reserve |
|
|
Balance at the beginning of the year |
182.14 |
207.61 |
Add: Accretion during the year |
25.47 |
0.00 |
Balance at the end of the year |
207.61 |
207.61 |
c. Currency and Gold Revaluation Account |
|
|
Balance at the beginning of the year |
4,731.72 |
5,201.13 |
Add: Net Accretion (+)/Net Depletion (-) during the year |
(+) 469.41 |
(+) 520.50 |
Balance at the end of the year |
5,201.13 |
5,721.63 |
d. Investment Revaluation Account |
|
|
Balance at the beginning of the year |
122.22 |
24.85 |
Add: Net Accretion (+)/Net Utilisation (-)during the year |
(-) 97.37 |
(+) 13.06 |
Balance at the end of the year |
24.85 |
37.91 |
e. Foreign Exchange Forward Contracts Valuation Account
(Previously known as Exchange Equalisation Account) |
|
|
Balance at the beginning of the year |
24.05 |
16.99 |
*Transfer from Exchange Account/** MTM gain on forward contracts |
16.99* |
42.98** |
Add: Net Accretion (+)/Net Utilisation (-) during the year |
(-) 24.05 |
(-) 16.99 |
Balance at the end of the year |
16.99 |
42.98 |
f. Provision for Payables |
18.43 |
16.55 |
g. Surplus Transferable to the Government of India |
330.10 |
526.79 |
h. Miscellaneous |
67.23 |
68.24 |
i. Total (a to h) |
8,082.86 |
8,838.23 |
c) Currency and Gold Revaluation Account
(CGRA)
Unrealised gains/losses on valuation of
Foreign Currency Assets (FCA) and gold due
to movements in price of gold are not taken
to the Profit & Loss Account but instead
recorded under a balance sheet head named
as the Currency and Gold Revaluation Account (CGRA). CGRA represents the
accumulated net balance of unrealised gains
and losses arising out of valuation of FCA and
gold and, therefore, its balance varies with the
size of asset base, movement in the exchange
rate and price of gold. During 2013-14, the
balances in CGRA increased by `520.50
billion from `5,201.13 billion as on June 30,
2013 to `5,721.63 billon as on June 30, 2014
mainly due to the depreciation of US Dollar
against other major currencies and of the
rupee against the US Dollar.
Table XII.4: Balances in Contingency Reserve and Asset Development Reserve |
(` billion) |
As on June 30 |
Balance in CR |
Balance in ADR |
Total |
CR and ADR as percentage
to total assets |
1 |
2 |
3 |
4=(2+3) |
5 |
2010 |
1585.61 |
146.32 |
1731.92 |
11.3 |
2011 |
1707.28 |
158.66 |
1865.94 |
10.3 |
2012 |
1954.05 |
182.14 |
2136.19 |
9.7 |
2013 |
2216.52 |
207.61 |
2424.13 |
10.1 |
2014 |
2216.52 |
207.61 |
2424.13 |
9.2 |
d) Investment Revaluation Account (IRA)
The Reserve Bank marks to market the foreign
dated securities at market prices on the last
business day of each month and the unrealised
gains/losses arising therefrom is transferred
to the IRA. The balance in the IRA as on June
30, 2014 was `37.91 billion, as compared with
`24.85 billion as on June 30, 2013. The
increase in balance in this account was mainly
due to market fluctuations.
e) Foreign Exchange Forward Contracts
Valuation Account (FCVA) [previously known
as Exchange Equalisation Account (EEA)]
As per the revised accounting policy for
forward contracts suggested by the Technical
Committee II implemented during the year,
the Exchange Equalisation Account (EEA)
which was used for recording the MTM losses
on outstanding forward contracts has been
renamed as ‘Foreign Exchange Forward
Contracts Valuation Account’ (FCVA) and both
the MTM gains as well as losses on foreign
exchange forward contracts that are entered
into as part of the Bank’s intervention
operations are booked under this head of
account. The amounts recorded in this
account will be reversed on the maturity of the
respective contracts. The balance in FCVA as
on June 30, 2014 was `42.98 billion, as
against a balance of `16.99 billion as on June 30, 2013. The position of balances in CGRA,
FCVA & IRA for the last five years is given in
Table XII.5.
Table XII.5: Balances in Currency and Gold
Revaluation Account (CGRA), Foreign Exchange
Forward Contracts Valuation Account (FCVA) |
[previously Exchange Equalisation Account (EEA)]
and Investment Revaluation Account (IRA) |
(` billion) |
As on June 30 |
CGRA |
FCVA* |
IRA |
1 |
2 |
3 |
4 |
2010 |
1,191.34 |
0.19 |
93.71 |
2011 |
1,822.86 |
0.01 |
42.69 |
2012 |
4,731.72 |
24.05 |
122.22 |
2013 |
5,201.13 |
16.99 |
24.85 |
2014 |
5,721.63 |
42.98 |
37.91 |
*EEA till 2012-13 |
f) Provision for Outstanding Expenses
An amount of `16.55 billion has been set aside
as provisions for the year 2013-14; the
corresponding figure for the year 2012-13 was
`18.43 billion.
g) Surplus transferable to the Government of
India
Under Section 47 of the Reserve Bank of India
Act, after making provisions for bad and
doubtful debts, depreciation in assets,
contribution to staff and superannuation fund
and for all matters for which provisions are to
be made by or under the Act or that are
usually provided by bankers, the balance of
the profits of the Bank are required to be paid
to the Central Government. Under Section 48
of the Reserve Bank Act, 1934 the Bank is
not liable to pay income tax or super tax or
any other tax on any of its income, profits or
gains and is also exempt from payment of
wealth tax. Accordingly, after adjusting the
expenditure including the contribution of an
amount of `40 million for the statutory funds,
`526.79 billion represented the surplus transferable to the government for the year
2013-14. The amount which was transferred
to the Government on August 11, 2014
constituted 99.99 per cent of total surplus
(before transfer to four funds) as compared
with 37.2 per cent and 53.4 per cent in
2011-12 and 2012-13, respectively (Table
XII.16). The amount was inclusive of `0.03
billion towards notional service tax payable
on account of the MICR cheque processing
charges on a self-assessment basis as was
done in the earlier years and `12.69 billion
as against `13.22 billion in the previous year,
payable to the government towards the
difference in interest expenditure borne by
the Government consequent on conversion
of special securities into marketable securities.
h) Miscellaneous
This is a residual head including sub accounts,
such as, balances payable on account of leave
encashment, reserve for interest earned on
securities earmarked for the employee funds,
the value of collateral held as margin for repo
transactions, medical provisions for employees,
etc. Miscellaneous liabilities stood at `68.24
billion as on June 30, 2014 as against `67.23
billion as on June 30, 2013.
Banking Department – Assets
XII.9 The assets of the Banking Department
comprise Notes, Rupee Coin, Small Coin, Bills
Purchased and Discounted, Balances Held
Abroad, Investments, Loans and Advances and
Other Assets. They are presented in the balance
sheet in descending order of liquidity.
i) Notes, Rupee Coin and Small Coin
This is the stock of bank notes, one rupee
notes, rupee coins of `1, 2, 5 and 10 and small
coins kept in the vaults of the Banking
Department to meet the day to day
requirements of the banking functions
conducted by the Reserve Bank. The value of this stock increased by 37.5 per cent from
`0.08 billion as on June 30, 2013 to `0.11
billion as on June 30, 2014.
ii) Bills purchased and discounted
Though the Reserve Bank can undertake
purchase and discounting of commercial bills
under the RBI Act, no such activity has been
undertaken in 2013-14; consequently, there
was no such asset in the books of the Reserve
Bank as on June 30, 2014.
iii) Foreign Currency Assets (FCA) and
Foreign Exchange Reserves (FER)
The Foreign Currency Assets (FCA) of the
Bank are reflected under the following heads
in the Balance Sheet: (a) Balances Held
Abroad in foreign currency, shown as a distinct
item under the assets of the banking
department (b) Foreign Securities (consisting
of deposits, T- bills, Dated Securities and BIS
/ SWIFT shares) held as part of Banking
Department’s Investments and (c) Foreign
Securities (consisting of Deposits, T-bills and
dated securities) held as Issue Department
assets as mentioned in paragraph on “Issue
Department Assets”.
Balances Held Abroad include (i) deposits with
other central banks, (ii) deposits with the
Bank for International Settlements (BIS),
(iii) balances with foreign branches of
commercial banks,(iv) investments in foreign
treasury bills and securities and (v) Special
Drawing Rights (SDR) acquired from the
Government of India during the year. The
position of FCA of the Bank for the last two
years is given in Table XII.6.
The Foreign Exchange Reserves (FER)
predominantly comprises FCA, besides gold,
Special Drawing Rights (SDRs) and Reserve
Tranche Position (RTP). Reserve Tranche
Position in the IMF is not part of the Bank’s
balance sheet but are held by the Government of India and therefore not reflected in the
Reserve Bank’s balance sheet.The Foreign
Exchange Reserves as at June 30, 2013 and
June 30, 2014 in Indian Rupees & the US
dollar, which is the numeraire for our foreign
exchange reserves, were as under [Tables
XII.7 (a) and (b)].
Table XII.6: Details of Foreign Currency Assets |
(` billion) |
Particulars |
As on June 30 |
2013 |
2014 |
1 |
2 |
3 |
I. Held in Issue Department |
11,329.10 |
12,783.31 |
II. Held in Banking Department |
|
|
(a) Included in Investments* |
523.57 |
1,069.45 |
(b) Balances Held Abroad |
3,395.01 |
3,726.76 |
Total |
15,247.68 |
17,579.52 |
*: including Foreign Securities and Shares in BIS and SWIFT (items
ii plus iii of Table XII.8)
@: including SDRs valued at `49.31 billion
Notes : 1. Uncalled amount on partly paid shares of the Bank for
International Settlements (BIS) as on June 30, 2014
was `1.12 billion (SDR 12,041,250). The amount was
`1.08 billion (SDR 12,041,250) in the previous year.
2. RBI has agreed to make resources available under
the IMF’s New Arrangements to Borrow (NAB) [which
subsumes the earlier commitment of US$ 10 billion
(`600.93 billion) under the Note Purchase Agreement]
up to a maximum amount of SDR 8,740.82 million
(`812.00 billion /US$ 13.51 billion). As on June 30,
2014, investments amounting to SDR 1,200.90 million
(`111.56 billion/US$ 1.86 billion) have been made
under the NAB.
3. RBI has agreed to invest up to an amount, the
aggregate of which shall not exceed US$ 5 billion
(`300.47 billion), in the bonds issued by India
Infrastructure Finance Company (UK) Limited. As on
June 30, 2014, the Reserve Bank has invested US$
1,181 million (`70.97 billion) in such bonds.
4. In terms of the Note Purchase Agreement (NPA) 2012
entered into by RBI with IMF, RBI would purchase SDR
denominated Notes of IMF for an amount up to the
equivalent of USD 10 billion (`600.93 billion).
5. During the year 2013-14, the Reserve Bank and
Government of India (GoI) entered into a MoU for
transfer of SDR holdings from GoI to RBI in a phased
manner. As on June 30, 2014, SDRs 530.80 million
(`49.31 billion; US$ 820.56 million) were held by the
Bank. |
Table XII.7(a): Foreign Exchange Reserves
in Rupee |
(` billion) |
|
As on |
Variation |
June 30,
2013 |
June 30,
2014 |
Absolute |
Per cent |
1 |
2 |
3 |
4 |
5 |
Foreign Currency Assets (FCA) |
15,247.69 |
17,530.21# |
2,282.52 |
14.97 |
Gold |
1286.86 |
1240.02@ |
(-) 46.84 |
(-) 3.64 |
Special Drawing Rights (SDR) |
259.20 |
268.31 |
9.11 |
3.51 |
Reserve Position in the IMF* |
130.67 |
103.23 |
(-) 27.44 |
(-) 21.00 |
Total Foreign Exchange Reserves (FER) |
16,924.42 |
19,141.77 |
2,271.35 |
13.10 |
# : Excludes SDR Holdings of the Reserve Bank amounting to
`49.31 billion which is included under the SDR holdings.
@: Of this, gold valued at `649.78 billion is held as an asset of
Issue Department and gold valued at `590.24 billion is held
under ‘Other Assets’ in the Banking Department.
*: Reserve Tranche Position in the International Monetary Fund
(IMF), which was shown as a memo item from May 23, 2003
to March 26, 2004 has been included in the reserves from the
week ended April 2, 2004.
|
Table XII.7(b): Foreign Exchange Reserves
in USD |
(USD billion) |
|
As on |
Variation |
June 30,
2013 |
June 30,
2014 |
Absolute |
Per cent |
1 |
2 |
3 |
4 |
5 |
Foreign Currency Assets (FCA) |
254.37* |
289.32** |
34.95 |
13.74 |
Gold |
21.55 |
20.63 |
(-) 0.92 |
(-) 4.27 |
Special Drawing Rights (SDR) |
4.34 |
4.47 |
0.13 |
3.00 |
Reserve Position in the IMF |
2.19 |
1.72 |
(-)0.47 |
(-) 21.46 |
Total Foreign Exchange Reserves (FER) |
282.45 |
316.14 |
33.69 |
11.93 |
* : Excluding USD 950 million invested in bonds of IIFC (UK) and
Bhutan currency (BTN) equivalent of USD 100 million received
from Bhutan under a Currency Swap arrangement for SAARC
countries. these are not considered as part of forex reserves.
** : Excluding USD 1,181 million invested in bonds of IIFC (UK)
and SDRs equivalent to USD 820.56 million acquired by the
Reserve Bank.
|
Table XII.8: Investments of the
Banking Department |
(` billion) |
Investments |
2012-13 |
2013-14 |
1 |
2 |
3 |
a) Government of India Rupee securities@ |
6,739.33 |
6,684.68 |
b) Foreign securities |
520.90 |
1,066.69 |
c) Shares in BIS/SWIFT |
2.67 |
2.76 |
d) Holdings in Subsidiaries / Associate Institutions |
13.20 |
13.20 |
Total |
7,276.10 |
7,767.33 |
@: includes `452.65 billion for the year 2013-14 and `454.02 for
the year 2012-13 in the form of oil bonds issued by the Government
of India. |
iv) Investments
Investments of Banking Department given in
Table XII.8 comprise the following:-
a) The Bank’s holdings of Government of India
(GOI) Rupee Securities came down from
`6,739.33 billion in 2012-13 to `6,684.68
billion in 2013-14. The total rupee securities
in the portfolio has gone down marginally
during the year 2013-14 as the redemptions
(of `236.38 billion) and change in GOI
balances (of `182.85 billion) exceeded the
purchases through OMO (of `302.83 billion).
The Bank’s own holdings of GOI Rupee
securities was `5,663.32 billion; `951.42
billion represented the collateral received
under Repurchase Agreement–Repo while
`92.46 billion was the value of securities
pertaining to the Marginal Standing Facility -
(MSF) adjusted for securities given out under Reverse Repurchase Agreement-reverse repo
of `22.52 billion.
b) Foreign securities represent debt of sovereigns
and supranational institutions and other
instrument or institution as approved by the
Central Board of the Bank in accordance with
the provisions of the Reserve Bank of India
Act, 1934. A part of foreign securities are held
in the Banking Department as asset earmarked
to cover any future expansion in Issue
Department liabilities.
c) Shares held in the Bank for International
Settlements (BIS) and the Society for Worldwide
Interbank Financial Telecommunication
(SWIFT) amounting to `2.76 billion.
d) The details of holdings in subsidiaries /
associate institutions as on June 30, 2014 are
given in Table XII.9.
v) Loans and Advances
a) Central and State Governments
These loans take the form of Ways and Means
Advances (WMA)extended in terms of section
17(5) of the Reserve Bank of India Act and
Overdraft (OD) facilities, limits for which are
fixed from time to time in consultation with the
governments. No loans and advances to the
Central Government were outstanding as on
June 30, 2014; as on June 30, 2013, the
corresponding figure was `146.61 billion.
Loans and advances to the State Governments
as on June 30, 2014 stood at `6.65 billion as
compared with `21.45 billion as on June 30,
2013.
Table XII.9: Holdings in subsidiaries/associates |
(Amount in ` million) |
|
Cost |
% holding |
1 |
2 |
3 |
(a) Deposit Insurance and Credit Guarantee Corporation (DICGC) |
500.00 |
100.0 |
(b) National Bank for Agriculture and Rural Development( NABARD) |
200.00 |
1.0 |
(c) National Housing Bank ( NHB) |
4,500.00 |
100.0 |
(d) Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL) |
8,000.00 |
100.0 |
Total |
13,200.00 |
– |
b) Loans and advances to Commercial and
Co-operative banks
These include refinance availed of from the
Reserve Bank under the export credit
refinance (ECR) facility against eligible
outstanding export credit. The ECR refinance
limit changes automatically with the
outstanding eligible export credit, and the
annual increase/decrease reflects increase/
decrease in actual utilisation of the facility by
banks. Utilisation of the ECR increased from
`188.82 billion as on June 30, 2013 to `295.51
billion as on June 30, 2014.
c) Loans and advances to NABARD
The Reserve Bank can extend loans to
NABARD under section 17 (4E) of the RBI
Act. Presently no loans are outstanding.
d) Loans and advances to others
The balance under this head represents loans
to the Small Industries Development Bank of
India (SIDBI), National Housing Bank (NHB)
and Primary Dealers (PDs) amounting to `50
billion, `18.5 billion and `0.1 billion respectively.
The facility extended in November 2013 to
SIDBI was for one year with a 90 day tenure
and a cut off rate pertaining to the immediately
preceding 14 day term repo rate, payable at
monthly rests. The facility for NHB was
extended thirteen years ago at a rate of 6 per
cent payable half-yearly. The liquidity support
for PDs is primarliy provided so that they have
enough reserves to participate in the primary
auctions. The utilisation under this facility
increased mainly due to increase in the
borrowing programme of Government of India.
vi) Other Assets
‘Other Assets’ of Banking Department (Table
XII.10) comprise fixed assets (net of
depreciation), gold held abroad (265.49 metric
tonnes), accrued income (mainly comprising
interest income accrued on balance sheet date on the Bank’s domestic and foreign
investments), Swap Amortisation Account
(SAA), Revaluation of Forward Contracts
Account (RFCA) and miscellaneous assets.
Miscellaneous assets comprise mainly loans
and advances to staff, amount spent on
projects pending completion, the margin
offered for reverse repo transactions, security
deposit paid, and items in transit representing
inter-office transactions (through the RBI
General Account), etc.
Table XII.10: Details of Other Assets |
(` billion) |
Particulars |
As on June 30 |
2013 |
2014 |
1 |
2 |
3 |
I. |
Fixed Assets (net of accumulated depreciation) |
4.50 |
1.07 |
II. |
Gold |
612.54 |
590.24 |
III. |
Accrued income (a + b) |
223.88 |
222.46 |
|
a. on loans to employees |
2.98 |
0.66 |
|
b. on other items |
220.90 |
221.80 |
IV. |
Swap Amortization Account |
0.00 |
59.30 |
V. |
Revaluation of Forward Contracts Account |
0.00 |
42.85 |
VI. |
Miscellaneous |
13.64 |
17.45 |
|
Total |
854.56 |
933.37 |
Swap Amortisation Account (SAA)
Based on the recommendations of the
Technical Committee II, in the case of swaps
that are in the nature of repo at off-market
rates, the difference between the future
contract rate and the rate at which the contract
is entered is being amortised over the period
of the contract and held in the Swap
Amortisation Account. The balance in this
account as on June 30, 2014 was `59.30
billion.
Revaluation of Forward Contracts Account
(RFCA)
As recommended by the Technical Committee
II, in the case of forward contracts that are entered into as part of intervention operations,
the MTM gains have been recorded in this
account to be reversed on the maturity of the
underlying contracts. The balance in this
account as on June 30, 2014 was `42.85
billion. The value of ‘Other Assets’ increased
from `854.56 billion to `933.37 billion as on
June 30, 2014, mainly on account of
amortisation of off- market swaps and MTM
gains on revaluation of forward contracts as
indicated in above paragraphs.
Table XII.11: Gross Income |
(` billion) |
Item |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
2013-14 |
1 |
2 |
3 |
4 |
5 |
6 |
A. Foreign Sources |
|
|
|
|
|
Interest, Discount, Exchange |
251.02 |
211.5 |
198.10 |
207.46 |
197.68 |
B. Domestic Sources |
|
|
|
|
|
(i)
Interest |
66.47 |
150.32 |
323.39 |
523.06 |
435.38 |
(ii)
Other Earnings |
11.35 |
8.88 |
10.27 |
13.05 |
13.11 |
Total: (i) + (ii) |
77.82 |
159.20 |
333.66 |
536.11 |
448.49 |
C. Gross Income (A+B) |
328.84 |
370.70 |
531.76 |
743.58 |
646.17 |
D. Transfer to Contingency Reserve |
51.68 |
121.67 |
246.77 |
262.47 |
0 |
E. Transfer to Asset Development Reserve |
5.50 |
12.35 |
23.48 |
25.47 |
0 |
F. Total Income(C-D-E) |
271.66 |
236.68 |
261.51 |
455.64 |
646.17 |
ANALYSIS OF INCOME AND EXPENDITURE
Income
XII.10 The Reserve Bank’s income is drawn from
(i) Interest receipts, (ii) Discount, (iii) Exchange,
(iv) Commission and (v) Others including Rent
Realised, Profit or loss on sale of Bank’s property
and Provisions no longer required. Of these,
Interest earnings forms the major portion
supplemented by relatively small amounts of
income from other sources, viz., discount,
exchange, commission and others. Details of the
gross income and the earnings from domestic and
foreign sources for the last five years are presented
in Table XII.11.
Earnings from Foreign Sources
XII.11 The income from foreign sources which is
derived from deployment of the foreign currency
assets decreased by `9.78 billion (4.7 per cent)
from `207.46 billion in 2012-13 to `197.68 billion
in 2013-14. The rate of earnings on foreign
currency assets was lower at 1.21 per cent in 2013-
14 as compared with 1.45 per cent in 2012-13 due
to low interest rates in the international markets
during the year (Table XII.12).
Table XII.12: Earnings from Foreign Sources |
(` billion) |
Item |
Year ended |
Variation |
June 30,
2013 |
June 30,
2014 |
Absolute |
Per cent |
1 |
2 |
3 |
4 |
5 |
Foreign Currency Assets (FCA) |
15,247.68 |
17,579.52 |
2,331.84 |
15.29 |
Average FCA |
14281.58 |
16,368.93 |
2,087.35 |
14.62 |
Earnings from FCA
(interest, discount, exchange gain/loss, capital gain/loss on securities)* |
207.46 |
197.68 |
(-) 9.78 |
(-) 4.71 |
Earnings from FCA as per cent of average FCA |
1.45 |
1.21 |
- |
- |
* Earnings include swap premium of `59.30 billion during 2013-14 |
Earnings from Domestic Sources
XII.12 The net income from domestic sources
decreased from `536.11 billion in 2012-13 to
`448.49 billion in 2013-14, recording a fall of 16.3
per cent. A detailed break-up of the various
components of domestic income is provided in
Table XII.13. Inspite of the decrease in the total
holding of Rupee securities (Table XII.8), the
income from coupon receipts had gone up from
`408.68 billion in 2012-13 to `470.53 billion in
2013-14 on account of net purchases of government
securuites worth `302.83 billion in the year.
However, the overall decrease was primarily on
account of increase in depreciation booked on the
Rupee securities from `55.38 billion in 2012-13 to
`480.45 billion in 2013-14 (as yields generally
hardened in 2013-14 as compared with the
previous financial year).
XII.13 The net interest income from LAF and MSF
increased from `64.90 billion in 2012-13 to `76.47
billion in 2013-14, largely on account of (i) increase
in the MSF rate by 200 bps in July 2013 and
(ii) significant portion of LAF borrowings being
made through term repo window at rates higher
than the prevailing repo rate.
XII.14 Interest income received on account of
WMA/OD from the Centre for July 2013-June 2014
period stood higher at `3.22 billion as compared
to `0.67 billion for the corresponding period during
2012-13. With the Centre availing of WMA for 52
days and OD for 10 days during the year as
compared to WMA for 27 days and no OD in the
previous year. The monthly average utilisation of
WMA/OD by the Centre was `299.4 billion in
2013-14 as against `98.1 billion in 2012-13.
Table XII.13: Earnings from Domestic Sources |
(` billion) |
Item |
Year ended |
Variation |
June 30, 2013 |
June 30, 2014 |
Absolute |
Per cent |
1 |
2 |
3 |
4 |
5 |
Domestic Assets |
8,659.35 |
8,664.04 |
4.65 |
0.05 |
Weekly Average of Domestic Assets |
7,724.84 |
8,694.77 |
969.95 |
12.56 |
Earnings (I + II+III) |
536.11 |
448.49 |
(-)87.62 |
(-)16.34 |
I. Interest and other Securities Related Income |
|
|
|
|
i) Profit on Sale of Securities |
85.47 |
331.37 |
245.90 |
287.70 |
ii) Net Interest on LAF operations |
64.79 |
59.02 |
(-)5.77 |
(-)8.90 |
iii) Interest on MSF operations |
0.11 |
17.45 |
17.34 |
15763.64 |
iv) Interest on holding of Domestic Securities |
408.68 |
470.53 |
61.85 |
15.13 |
v) Depreciation |
55.38 |
480.45 |
425.07 |
767.55 |
Total (i+ii+iii+iv-v) |
503.67 |
397.92 |
(-)105.75 |
(-)21.00 |
II. Interest on Loans and Advances |
|
|
|
|
i) To Government (Central & States) |
1.26 |
3.88 |
2.63 |
208.73 |
ii) To Banks & Financial Institutions |
17.65 |
33.10 |
15.45 |
87.54 |
iii) To Employees |
0.48 |
0.48 |
0.00 |
0.0 |
Total (i+ii+iii) |
19.39 |
37.46 |
18.07 |
93.19 |
III. Other Earnings |
|
|
|
|
i) Discount |
0.28 |
0.01 |
(-)0.27 |
(-)96.43 |
ii) Exchange |
- |
- |
- |
- |
iii) Commission |
11.13 |
12.57 |
1.44 |
12.94 |
iv) Rent realised, Profit or Loss on sale of Bank’s property and Provisions no longer required. |
1.64 |
0.53 |
(-)1.12 |
(-)68.29 |
Total (i+ii+iii+iv) |
13.04 |
13.11 |
0.06 |
0.46 |
XII.15 As regards the States, the interest towards
WMA/OD recovered for July 2013-June 2014
period was `0.66 billion as compared to `0.59
billion during 2012-13. This is attributable to
marginally higher monthly average utilisation of
WMA/OD by the States at `58.34 billion in 2013-14
as against `54.57 billion in 2012-13.
Expenditure
XII.16 The Reserve Bank incurs expenditure in
the course of performing its statutory functions by
way of agency charges/commission, security
printing charges, expenses on remittance of
treasure besides staff related and other expenses.
The total expenditure of the Reserve Bank
decreased by 4.9 per cent from `125.49 billion in
2012-13 to `119.34 billion in 2013-14. The
expenditure is broadly categorised into three subgroups;
viz., Interest Payment, Establishment
Expenditure and Non-establishment Expenditure.
The break-up of the major heads of expenditure is
provided in Table XII.14.
i) Interest Payment
Interest paid during the year - representing
the Bank’s contribution by way of half-yearly
interest credited to the employee welfare funds viz. Medical Assistance Fund (MAF) and Dr
B.R. Ambedkar Fund, had risen marginally
from `0.03 billion in 2012-13 to `0.04 billion
in 2013-14.
Table XII.14: Expenditure |
(` billion) |
Item |
2009-
10 |
2010-
11 |
2011-
12 |
2012-
13 |
2013-
14 |
1 |
2 |
3 |
4 |
5 |
6 |
I. Interest Payment |
0.01 |
0.55 |
0.59 |
0.03 |
0.04 |
II.
Establishment |
19.87 |
23.01 |
29.93 |
58.59 |
43.24 |
III.
Non-establishment |
64.15 |
62.99 |
70.85 |
66.87 |
76.06 |
of which: |
|
|
|
|
|
(a)
Agency
charges/
commission |
28.55 |
30.12 |
33.51 |
28.07 |
33.25 |
(b)
Security
printing
charges |
27.54 |
23.76 |
27.04 |
28.72 |
32.14 |
(c)
Others |
8.06 |
9.11 |
10.3 |
10.08 |
10.67 |
Total (I+II+III) |
84.03 |
86.55 |
101.37 |
125.49 |
119.34 |
ii) Establishment Expenditure
The establishment expenses decreased by
26.2 per cent from `58.59 billion in 2012-13
to `43.24 billion in 2013-14. This can be
attributed to decrease in the contribution
towards accrued liabilities of the gratuity and
superannuation fund and other funds based
on the actuarial valuation.The contribution for
the year 2013-14 was `18.09 billion as against
`35.32 billion in the previous year.The Bank’s
Investments equivalent to the balances in
Provident Fund, Gratuity & Superannuation
Fund and Leave Encashment Fund have been
ear-marked for these Funds. Provident Fund
and Gratuity & Superannuation Fund are held
as ‘Deposits’ with the Bank. Leave Encashment
liability is included under ‘Other Liabilities’.
iii) Non-Establishment Expenditure
a) Agency Charges
There are four types of expenses booked
under ‘Agency Charges’ as outlined in Table
XII.15.
Table XII.15: Agency Charges |
(` million) |
|
2012-13 |
2013-14 |
1 |
2 |
3 |
Agency Commission on Government Transactions |
27,264.39 |
27,813.97 |
Underwriting Commission paid to the Primary Dealers |
218.65 |
4,811.98 |
Sundries (Handling charges paid to banks for Relief/Savings Bonds subscriptions) |
1.11 |
0.42 |
Fees paid to the External Asset Managers ,custodians etc. |
582.38 |
628.11 |
Total |
28,066.53 |
33,254.47 |
Agency Commission paid to banks
The Reserve Bank discharges the function of
banker to the government through a large
network of agency bank branches that serve
as retail outlets for government transactions.
The Reserve Bank pays commission to these
agency banks at prescribed rates which were
revised with effect from July 01, 2012. The
agency commission paid to these banks on
account of Government business for the year
2013-14 was `27.81 billion as compared with
`27.26 billion for the year 2012-13, an
increase of 2.02 per cent reflecting the growth
in the volume of government business.
Underwriting Commission Fees paid to the
Primary Dealers (PDs)
The expenditure on underwriting commission
increased substantially as PDs quoted higher
underwriting commission rates in view of
adverse market conditions during the first half
of the year.
Fees paid to the External Asset Managers,
custodians etc.
Fees amounting to `0.63 billion were paid in
2013-14 to the external asset managers, custodians etc., who are entrusted with the
management of a small portion of the Reserve
Bank’s foreign exchange reserves as against
`0.58 billion in 2012-13.
Table XII.16: Trends in Gross Income, Expenditure and Net Disposable Income |
(` billion) |
Item |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
2013-14 |
1 |
2 |
3 |
4 |
5 |
6 |
a) Gross Income |
328.84 |
370.70 |
531.76 |
743.58 |
646.17 |
b) Transfers to Internal Reserves (i+ii) |
57.18 |
134.02 |
270.25 |
287.94 |
0.00 |
(i) Contingency Reserve |
51.68 |
121.67 |
246.77 |
262.47 |
0.00 |
(ii) Asset Development Reserve |
5.50 |
12.35 |
23.48 |
25.47 |
0.00 |
c) Net Income (a-b) |
271.66 |
236.68 |
261.51 |
455.63 |
646.17 |
d) Total Expenditure |
84.03 |
86.55 |
101.37 |
125.49 |
119.34 |
e) Net Disposable Income (c-d) |
187.63 |
150.13 |
160.14 |
330.14 |
526.83 |
f) Transfer to funds* |
0.04 |
0.04 |
0.04 |
0.04 |
0.04 |
g) Surplus transferred to the Government (e-f) |
187.59 |
150.09 |
160.10 |
330.10 |
526.79 |
Transfer of Surplus to Government as per cent of Gross Income less Total Expenditure |
76.6 |
52.8 |
37.2 |
53.4 |
99.99 |
* : An amount of `10 million each has been transferred to the National Industrial Credit (Long Term Operations) Fund, the National Rural Credit
(Long Term Operations) Fund, the National Rural Credit (Stabilisation) Fund and the National Housing Credit (Long Term Operations) Fund
during each of the five years. |
b) Security printing
The expenditure incurred on security printing
charges (primarily for printing of currency
notes) increased by 11.9 per cent from `28.72
billion in 2012-13 to `32.14 billion in 2013-14.
This rise was mainly on account of an increase
of 15.14 per cent in the total supply of
banknote forms and a marginal increase in
rates quoted by the Bharatiya Reserve Bank
Note Mudran Pvt. Ltd. (BRBNMPL) for the
currency notes supplied by them.
c) Others
Other non-establishment expenses consisting
of the expenditure on account of remittance
of treasure, printing and stationery, audit fees
and related expenses, miscellaneous
expenses, etc. increased marginally from
`10.08 to `10.67 billion. An amount of `24.22
million was paid for audit fees and expenses
during 2013-14 as fees and expenses for
statutory audit, concurrent audit and special audit for various purposes conducted in the
Bank. Miscellaneous expenses mainly include
contributions to various academic, training
institutes, etc.
The trends over the last five years in Income,
Expenditure and Net Disposable Income have
been indicated in Table XII.16.
The previous year’s figures have been regrouped
/ reclassified, wherever necessary, to conform
to the current year’s presentation.
Auditors
The statutory auditors of the Bank are appointed
by the Central Government in terms of section 50
of the RBI Act, 1934.The accounts of the Reserve
Bank for the year 2013-14 were audited by
M/s. Haribhakti & Co. LLP, Mumbai and M/s CNK
& Associates, LLP, Mumbai as the Statutory
Central Auditors and M/s. S.K. Mehta & Co., New
Delhi, M/s. P.K.F. Sridhar & Santhanam & Co.,
Chennai and M/s Lodha & Co., Kolkata as the
Statutory Branch Auditors.
|