Stock Market Tips >> How demonetisation was unprofitable for RBI

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While the jury is out on the costs and benefits of demonetization, for the Reserve Bank of India (RBI) at least, the note ban was one of the key reasons for lower profits. To that limited extent, the government also had to bear the brunt in the form of the lower dividend it received from the central bank. RBI paid only Rs30,663 crore as dividend compared to Rs65,880 crore a year ago.

Here’s how the math works:

RBI’s income for its financial year ending 30 June fell 23.56% to a Rs61,818 crore. Its income fell because of a couple of reasons.

One, the central bank’s income from foreign sources fell 35.3% because of the appreciation of the rupee and the lower yield on foreign currency assets. This was lower at 0.8% in 2016-17 compared to 1.3% a year earlier.