RBI Annual Report FY23 Highlights GDP Growth, Currency In Circulation And RBI's Annual Income The report provides information on the RBI's functioning through the fiscal year as well as the state of the economy
By Teena Jose •
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The Reserve Bank of India (RBI) has released its annual report for the year 2022-23 on May 30 that provides information on the RBI's functioning through the fiscal year as well as the state of the economy. The report stated that India's growth momentum is likely to continue in 2023-24 even as it made a case for pushing structural reforms to deal with the geopolitical developments and also to achieve sustained growth in the medium-term.
"Amidst strong global headwinds, the Indian economy is expected to have recorded a growth of 7.0 per cent in real GDP in 2022-23," the report said.
In the wake of the recently much-discussed INR 2000 note ban, the report also mentions the current currency in circulation. It revealed that the value and volume of currency in circulation rose by 7.8% and 4.4%, respectively, during the financial year 2022-23 as compared with 9.9% and 5.0%, respectively.
In addition, speaking about the volume, the report added that, "INR 500 denomination constituted the highest share at 37.9%, followed by INR 10 denomination banknotes which constituted 19.2% of the total banknotes in circulation as on March 31, 2023. There were 5,16,338 lakh pieces of INR 500 denomination notes totalling INR 25,81,690 crore at end-March 2023. The number of INR 500 notes at end-March 2022 were 4,55,468 lakh.
"Even though the currency-GDP ratio in India is moderating, it remains relatively at elevated levels vis-à-vis other major economies, widely referred to as currency demand paradox, particularly in the context of the exponential growth achieved in digital payments as a substitute of cash for effecting transactions. Since cash and digital modes are generally expected to substitute each other, the simultaneous rise in both seems counterintuitive," stated the annual report.
Adding on more to the factors affecting India's growth momentum, the report asserted that a sustained recovery in discretionary spending, particularly in contact intensive services, restoration of consumer confidence, high festival season spending after two consecutive years of COVID-19 induced isolation and the government's thrust on capex provided impetus to the growth momentum.
Furthermore, the annual report also shared that 2022-23 saw a47% increase in RBI's total income. Elaborately, RBI's total income in 2022-23 was INR 2.35 lakh crore, which is 47% more than the INR 1.6 lakh crore number for 2021-22.
Amidst all these positive sides, RBI also warned that 2022-23 saw 13,530 cases of bank frauds involving an amount of INR 30,252 crore. These numbers were 9,097 and INR 59,819 crore in 2021-22. Frauds on advances, which includes wilful loan defaults have fallen sharply in the last two years from INR 1.3 lakh crore to INR 28,792 crore in 2022-23.
