RBI’s risk provision accounts: The RBI’s main risk provision accounts are-:
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Contingency Fund(CF):
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This is a specific provision meant for meeting unexpected and unforeseen contingencies including:
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Depreciation in the value of securities,
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Risks arising out of monetary/exchange rate policy operations,
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Systemic risks and any risk arising on account of the special responsibilities enjoined upon the Reserve Bank.
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Currency and Gold Revaluation Account(CGRA):
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It is maintained by the Reserve Bank to take care of currency risk, interest rate risk and movement in gold prices.
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CGRA provides a buffer against exchange rate/ gold price fluctuations. It can come under pressure if there is an appreciation of the rupee vis-à-vis major currencies or a fall in the price of gold.
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Investment Revaluation Account Foreign Securities(IRA-FS):
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The unrealized gains or losses on revaluation in foreign dated securities are recorded in the IRA-FS account.
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Investment Revaluation Account-Rupee Securities(IRA-RS):
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The unrealized gains or losses on revaluation is accounted for in Investment Revaluation Account-Rupee Securities(IRA-RS).
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