RBI payout to government dips 20%

MUMBAI: Easy monetary policy of advanced markets has had its toll on RBI's profits. The central bank has only transferred Rs 15,009 crore as surplus to the government for the year-ended June 30, 2011, 20% lower than Rs 18,759 crore transferred for the year-ended June 30, 2010.

RBI earns its income essentially from two sources. One is by deploying its reserves in the overseas markets while the domestic income is essentially interest earned by lending to banks under repo transactions. Income on foreign sources, which of late accounts for a larger chunk of the central bank's earnings, has taken a hit this year.

This is because interest in advanced markets, where it deploys most of its foreign currency assets, was low throughout the year. Its domestic income is likely to be higher than last year as the central bank lent significant amounts under repo and also purchased government bonds from the market to release liquidity.

RBI's central board met in Mumbai on Thursday where it approved the transfer of surplus profit of Rs 15,009 crore to the government.