The RBI has retained an amount of Rs 73,615 crore within the RBI by transferring it to the Contingency Fund (CF).
It shall lead to a sharp fall in the transfer of surplus to the government in the current year.
Important value additions
Contingency Fund (CF)
It is a specific provision meant for meeting unexpected and unforeseen contingencies.
It includes depreciation in the value of securities, risks arising out of monetary/exchange rate policy operations, systemic risks and any risk arising on account of the special responsibilities enjoined upon the Reserve Bank.
This amount is retained within the RBI.
Section 47 of the RBI Act: Profits or surplus of the RBI are to be transferred to the government, after making various contingency provisions.
RBI’s’s main risk provision accounts: Contingency Fund, Currency and Gold Revaluation Account (CGRA), Investment Revaluation Account Foreign Securities (IRA-FS) and Investment Revaluation Account-Rupee Securities (IRA-RS).
The Currency and Gold Revaluation Account (CGRA)
It is maintained by the RBI to take care of currency risk, interest rate risk and movement in gold prices.
Unrealised gains or losses on valuation of foreign currency assets (FCA) and gold are not taken to the income account but instead accounted for in the CGRA.
