Seeing a significant growth in its financial accounts over the past few years, the Reserve Bank of India’s (RBI) latest annual report for FY2023-24 shows its balance sheet size grew 11.08% to ₹70.47 lakh crore ($844.76 billion) as of March 31, 2024, as compared to ₹63.4 lakh crore in the previous fiscal year. At $844.76 billion, the RBI’s balance sheet stands larger than the entire GDP of neighbouring Pakistan and Bangladesh combined, which as per the International Monetary Fund (IMF) are worth $375 billion and $460 billion, respectively.
The RBI says its balance sheet reflects activities carried out in pursuance of its various functions, including issuance of currency as well as monetary policy and reserve management objectives. “Increase on assets side was due to rise in foreign investments, gold, and loans and advances by 13.90 per cent, 18.26 per cent and 30.05 per cent, respectively.”
The Reserve Bank’s balance sheet size increased to 24.1% of the country’s GDP at end-March 2024 from 23.5% at end-March 2023, says the RBI. “The balance sheet has normalised to its prepandemic level,” it adds.
The RBI’s income for the year increased 17.04% to ₹2,75,572.32 crore against the income of ₹2,35,457.26 crore in the previous fiscal year. The year ended with an overall surplus of ₹2,10,873.99 crore as against ₹87,416.22 crore in the previous year, resulting in an increase of 141.23%.
On the liabilities side, expansion was due to an increase in notes issued, deposits and other liabilities by 3.88%, 27%, and 92.57%, respectively.
The apex bank says its domestic assets constituted 23.31%, while foreign currency assets, gold (including gold deposit and gold held in India) and loans and advances to financial institutions outside India constituted 76.69% of total assets as of March 31, 2024, against 26.08% and 73.92%, respectively, as of March 31, 2023.
The total expenditure of the apex bank declined to ₹64,694.33 crore in FY24, which includes a provision of ₹42,819.91 crore towards transfer to the Contingency Fund, as compared to ₹1,48,037.04 crore in FY23, which includes ₹1,30,875.75 crore towards transfer to Contingency Fund.
Notably, a provision of ₹42,819.91 crore was made and transferred to the Contingency Fund. “No provision was made towards Asset Development Fund (ADF).”
The RBI says the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment. “Real GDP growth is robust on the back of solid investment demand which is supported by healthy balance sheets of banks and corporates, the government’s focus on capital expenditure and prudent monetary, regulatory and fiscal policies.”
It adds that as headline inflation eases towards the target, it will spur consumption demand, especially in rural areas. “The external sector’s strength and buffers in the form of foreign exchange reserves will insulate domestic economic activity from global spillovers.”
