Reserve Bank of India’s profit is 2.4 times of Reliance Industries
The Reserve Bank of India (RBI), India’s central bank, reported a surplus of Rs 65,876 crore for the twelve months ended March 2016, the highest ever in its 81-year history.
At this level, RBI’s surplus is 2.4 times of Reliance Industries’ (RIL) profit of Rs 27,630 crore reported during the same period. RIL is India’s most profitable company, ahead of software companies like Tata Consultancy Services and Infosys.
And the biggest beneficiary of this record surplus is the central government. As per the RBI Act, the central bank has to transfer all its surplus to the government.
So how does the RBI earn money? Mainly through interest bearing domestic and foreign securities. Around 85% of its total income of Rs 80,870 crore.
And it hardly spends money with total expenses of Rs 14,990 crore. Salary bill (Rs 4,058 crore), agency charges (Rs 4,756 crore) and printing of notes (Rs 3,421 crore) were the major expenditure items. Agency charges are the commission paid by RBI to the banks that sell government securities. Apart from being the central bank, RBI also functions as a banker to the central government selling bonds.
Should the current arrangement of transferring all surplus to government continue, or should RBI be given powers to spend the money for public good? What do you think? Let us know.