')After recording a steep growth for over four years, RBI s profits almost halved to Rs 32,884 crore in FY10. However, its dividend payout to the government has not been commensurate with the revenue drop, indicating that it has transferred a larger share of its profits to the Centre.
In its annual report for FY10, which was released on Tuesday, RBI said: œAs return on foreign assets tracked the near-zero policy rates maintained by the central banks of advanced economies, income on such assets declined significantly.
As a result, the country s foreign exchange reserves, which are parked with foreign central banks, yielded very low returns.
As of end June 2010, RBI s total foreign currency assets were worth $249.6 billion as the central bank had parked nearly half ” $117.1 billion ” in various foreign central banks, besides IMF and the BIS (Bank of International Settlements). The rate of earnings on foreign currency assets and gold was lower at 2.09% in 2009-10 compared with 4.16% in 2008-09.
RBI has also spent more by way of interest as it was continuously mopping up funds under its reverse-repo window. This resulted in gross income falling from Rs 60,732 crore in FY09 to Rs 32,884 crore in 2009-10.
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