The Reserve Bank of India (RBI) on May 21, 2021 said it will transfer a surplus of Rs 99,122 crore to the Government of India for the nine-month period ended March 31, 2021.
- The transfer amount is 73.5 per cent higher than the Rs 57,128 crore transferred for 2019-20.
- Barring 2018/19, this is the highest ever transfer by the RBI in an accounting period. In FY19, Rs 1.76 lakh crore was transferred to the government which included a one-time transfer of extra reserves.
- The bank also decided to maintain the contingency risk buffer at 5.5 percent. The RBI is required to maintain a contingency risk buffer of 5.5-6.5 percent of its balance sheet.
- The decisions were taken at the 589th meeting of the RBI’s Board of Directors held under the chairmanship of Governor Shaktikanta Das.
Mandate
- The Reserve Bank of India, founded in 1934, operates according to the Reserve Bank of India Act of 1934.
- This act mandates that profits made by the central bank from its operations be sent to the Centre.
RBI’s earning sources
- The RBI earns money in a variety of ways.
- Through Open market operations, the RBI purchases or sells bonds in the open market in order to regulate money supply in the economy.
- Apart from the interest received from these bonds, the RBI may also profit from favourable changes in bond prices.
- Dealings in the foreign exchange market that the RBI engages in may also contribute to the bank’s profits. The RBI may buy dollars cheaply and sell them dear in the future to pocket profits.
