The Hindu Business Line : Apex bank's income nearly halves
I was always wondering why when all Commercial Banks follow the Financial / Accounting Year from April to March complying with the Income Tax Act and/or Indian Companies Act, the big brother, banker to the banker, banker to the government and regulator of banking in India, the RBI follows different period, ie., July to June. It is not understandable that even when all the States and Central Government also follow April to March as Financial Year.
I was told by a very senior Official of RBI that it has been the tradition to reckon the agricultural season July to June (as followed by the Cooperatives) as the basis for this practice. I also believe that this was decided over seventy years back (prior to independence). But, Banks in India were following Jan to December (may be British system) as their Financial Year till seventies and are now complying with Indian system. The RBI deals with all the Banks in the country and Government reg their Cash Balances, Current Accounts, Cheque Clearances, Investments in SLR, Capital Adequacy, Foreign Exchange dealings, Govt payments / accounts, Mint activities, SDRs, Issue and investment of Bonds, Interest Rate mechanism and so on, why not RBI too align with the same accounting period?
I am also surprised that when financial health of most of the Banks in the country is improving in the year 2009/2010 over the previous year 2008 (recession), how come almost all the performance indicators of RBI are on the downside? I am also not too sure whether the accounts and achievements of RBI are discussed in Parliament or by CAG. It is essential and calls for introspection that the leader should be a model in its own performance.