Choppy financial markets may not be suitable for the economy. Still, they provide the central bank with substantial profits, enabling it to pay out a generous dividend even as it beefs up its contingency reserves. According to the annual report, the RBI generated an income of Rs 2.35 lakh crore for FY23, a 47% increase from Rs 1.6 lakh crore in the corresponding quarter last year. Gains from the foreign exchange market drove the increase in income. The RBI made these profits as a collateral benefit in FY23 following its effort to prevent a sharp rupee depreciation by selling a large chunk of its foreign exchange reserves. According to the report, the RBI recorded a gain of Rs 1 lakh crore from foreign exchange transactions during the year. This enabled the central bank to expand the size of its contingency fund. The balance sheet size of the RBI grew by 2.5% during the financial year, reaching Rs 63.5 lakh crore compared to Rs 61.9 lakh crore in FY22. As a result, the RBI transferred a surplus of Rs 87,416 crore rupees to the government as dividend. The RBI has also allocated Rs 1.3L crore to its contingency risk buffer.