Sharp rise in expenses, reverse repo hit RBI surplus in FY22

The Reserve Bank of India’s (RBI) surplus to be transferred to the government in the fiscal year ended March 2022 fell primarily due to a sharp rise in expenditure, the central bank’s annual report showed.

While income for the year increased by 20%, expenditure increased by 280% which resulted in the overall surplus transferred to the government decreasing 69% to Rs 30,307.45 crore from Rs 99,122 crore in the previous year.

Total expenditure increased to Rs 1.29 lakh crore from Rs 34,147 crore a year ago. Expenditure included agency commissions to banks for processing government receipts and payments which increased 48% to Rs 3859 crore from Rs 2,611.05 crore in 2020-21. Expenditure incurred on printing of bank notes increased 24% to Rs 4985 crore from Rs 4,012.09 crore in 2020-21.

Besides the higher operational expenditure, RBI also had to pay interest on the excess funds kept by banks with it through the reverse repo window. This interest outgo nearly doubled to Rs 35,601 crore at the end of March 2022 from Rs 17,958 crore in March 2021.