How strong should RBI’s balance sheet be? Should it continue to build reserves and hold back payouts to the government? Does RBI have enough reserves to help the government revive struggling state-owned banks and prune fiscal deficit Such questions, rarely raised before, have taken political hues. RBI’s capital (equity plus reserves) to assets ratio is at 26.8%, one of the highest among central banks globally. Only four — in Norway, Russia, Malaysia and Colombia — have capital ratios higher than India’s central bank. Indeed, RBI is probably the most conservative in assessing balance sheet risks with coffers deep enough to take on many ‘Black Swan’ events.Central banks in Israel, Chile and Thailand keep little or no reserves while Bank of England and US Federal Reserve have capital ratios of 0.9%. The ratio is just 0.1% for The People’s Bank of China. Of RBI’s reserves of Rs 9.7 lakh crore, the contingency fund (which cannot be touched) stands at Rs 2.3 lakh crore while revaluation reserve (or unrealised gain) is close to Rs 7 lakh crore. Does it mean RBI should share a slice with the government? Some say ‘yes’.However, RBI has so far argued that due to India’s current account deficit and absence of a ‘ reserve currency ’ (like dollar or euro), it should hold larger reserves. ET takes a look at the numbers.