The Reserve Bank of India (RBI) earned 2.35 trillion rupees ($28.4 billion) in net income for the fiscal 2023 on higher forex gains, up from 1.6 trillion rupees in the previous year, its annual report released on Tuesday showed.
During the year, the central bank saw a gain of 1.03 trillion rupees from foreign exchange transactions, which allowed it to increase the size of its contingency fund, the report showed.
The RBI’s balance sheet size increased by 2.5% during in the financial year to 63.45 trillion rupees, from 61.90 trillion rupees in FY22, following which it transferred a surplus of 874.16 billion rupees to the government.
The central bank also transferred 1.3 trillion rupees to its contingency risk buffer, raising the size of this buffer to 6% of its balance sheet from 5.5% previously.
In the fiscal 2019, the RBI adopted a new Economic Capital Framework, which requires it to maintain a contingency risk buffer of 5.5%-6.5% of its balance sheet.
The new framework also allows the central bank to benchmark sales of foreign exchange to its historical average cost of acquiring those reserves, allowing it to realise gains on foreign exchange transactions during the year.