According to Gaura Sen Gupta, the chief economist at IDFC First Bank, the RBI balance sheet rose 11.4 percent in FY24 due to the increase in foreign currency assets which rose 13.8 percent on-year, while loans and advances to scheduled commercial banks jumped 136 percent and gold reserves rose 17.1 percent as it has bought over 25 tonnes in the first three months of 2024.
“The rise in foreign exchange reserves was driven by forex purchases by the RBI, which accounted for 70 percent of the increase, followed by revaluation gain,” Gupta said in a report.
According to a Union Bank report, the RBI primarily holds 70 percent of its balance sheet in the form of foreign currency assets and 20 percent in domestic government bonds and has earned an interest of Rs 1.5-1.7 trillion from these in FY24. Further, interest from liquidity operations also supported RBI earnings as the banking system switched back into deficit mode from September 2023, after three years of surplus.
Experts are of the view that the higher dividend by the RBI will support the government’s liquidity surplus, and, thereafter, expenditure, going forward.
The central board of the RBI has 13 members. Apart from the governor, the other members include the four deputy governors — Michael Debabrata Patra, M Rajeshwar Rao, T Rabi Sankar and Swaminathan J — and eight external members — Satish K Marathe, Revathy Iyer, Anand Mahindra, Venu Srinivasan, Pankaj Ramanbhai Patel and Ravindra H Dholakia apart from economic affairs secretary Ajay Seth and financial services secretary Vivek Joshi.
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