Manual on the Compilation of Flow of Funds Accounts of the

1

Manual on the Compilation of

Flow of Funds Accounts

of the Indian Economy

Reserve Bank of India

Mumbai

2015

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Manual and Compilation Guide for the Flow-of-Funds Accounts of the

Indian Economy, 20151

Contents Abbreviations ............................................................................................................................................ 5 A. Introduction ....................................................................................................................................... 7 1. Overview ................................................................................................................................................. 7 2. Institutional arrangements ............................................................................................................... 10 4. Institutional Units ............................................................................................................................... 10 5. Institutional Sectors ........................................................................................................................... 11 6. Financial Assets and Liabilities (Instruments) ............................................................................. 14 7. Sources of data .................................................................................................................................... 14 8. Balancing the accounts ...................................................................................................................... 16

a) Consistency between financial and non financial accounts ..................................................... 16 b) Stock/flow consistency ................................................................................................................... 17 c) Consistency checks/Control Totals ............................................................................................... 17

B. Compilation Guide .............................................................................................................................. 21 1. Total Economy .................................................................................................................................... 21 1.1 Non-Financial Corporations ........................................................................................................... 21 1.1.1. Non-Government non-financial companies ............................................................................ 21

Liabilities ............................................................................................................................................... 22 Deposits ............................................................................................................................................ 22 Debt Securities ................................................................................................................................. 22 Loans (Borrowings) ........................................................................................................................ 23 Equity (Paid-up capital) ................................................................................................................. 23 Trade payables and other current liabilities ............................................................................ 23 Reserves and Surplus ..................................................................................................................... 23 Provisions ......................................................................................................................................... 24

Financial Assets .................................................................................................................................... 24 Currency and deposit ..................................................................................................................... 24 Investments (Debt and equity securities) .................................................................................. 24 Loans and advances ........................................................................................................................ 24 Other non current assets ............................................................................................................... 24

Non-Financial Assets ........................................................................................................................... 24 Net fixed assets ................................................................................................................................ 24 Inventories ....................................................................................................................................... 25

2.2.2 Power Sector Companies and State Electricity Boards .......................................................... 25 Financial Liabilities ............................................................................................................................. 25

Deposits ............................................................................................................................................ 25 Debt securities (bonds and debentures) .................................................................................... 25 Loans (Borrowings) ........................................................................................................................ 25

1 The Manual would be updated on a periodic basis taking into account evolving changes in the national accounting framework and new data/data sources in line with the remaining recommendations of the Working Group.

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Other accounts payable ................................................................................................................. 26 Financial Assets ............................................................................................................................... 26

2.2.3 Co-operative non-credit societies .............................................................................................. 27 2.2.4 Port Trusts ...................................................................................................................................... 28

Liabilities ............................................................................................................................................... 28 Assets ..................................................................................................................................................... 28

2.2.5 Government Non-departmental non-financial undertakings .............................................. 29 (i) Central and State Government Companies ................................................................................. 29

Liabilities .......................................................................................................................................... 29 Financial Assets ............................................................................................................................... 30

1.2 Financial Corporations .................................................................................................................... 31 1.2.1 Central Bank – the Reserve Bank of India ................................................................................ 31

Liabilities ............................................................................................................................................... 31 Currency and deposits ................................................................................................................... 31 Equity and investment fund shares ............................................................................................. 32 Other accounts receivable/payable ............................................................................................ 33 Reserve funds & other funds ........................................................................................................ 34

Financial Assets .................................................................................................................................... 35 Monetary gold and SDRs ................................................................................................................ 35

Deposit-taking Corporations, except the Central Bank ................................................................... 37 Commercial Banks ............................................................................................................................... 37

Liabilities .......................................................................................................................................... 38 Equity and Investment Fund Shares............................................................................................ 39 Financial Assets ............................................................................................................................... 40

Co-operative Banks .............................................................................................................................. 43 State and Central Co-operative Banks ........................................................................................ 43 Financial Assets ............................................................................................................................... 44 Urban Cooperative Banks (UCBs) ................................................................................................ 46

Deposit-Taking Non-Banking Financial Companies (NBFC-D) ..................................................... 46 Deposits ............................................................................................................................................ 46 Debt securities ................................................................................................................................. 46 Loans (Borrowings) ........................................................................................................................ 46 Currency and deposits ................................................................................................................... 47 Debt securities ................................................................................................................................. 47 Loans and advances ........................................................................................................................ 47 Equity and Investment fund shares ............................................................................................. 47 Other accounts receivable / payable .......................................................................................... 47

Deposit-Taking Housing Finance Companies (HFC-D) ................................................................... 47 1.2.3 Mutual Funds ........................................................................................................................... 47 1.2.4 Other financial intermediaries, except insurance corporations and pension funds ....... 47

Primary Credit Societies ..................................................................................................................... 47 State Cooperative Agriculture and Rural Development Banks (SCARDBs) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) .......................................... 48 Industrial Co-operative Banks (State/Central) ............................................................................... 48 Financial Corporation and Companies ............................................................................................. 48

1.2.6 Insurance corporations ............................................................................................................... 49 1.2.7 Pension funds ................................................................................................................................. 49

Non- government Provident Funds ................................................................................................... 49

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2.3 General government ........................................................................................................................ 50 2.3.1 Central government including social security ....................................................................... 51

Liabilities .......................................................................................................................................... 51 Financial Assets .................................................................................................................................... 53

Currency and deposits ................................................................................................................... 53 Loans & Advances ........................................................................................................................... 53 Equity and Investment Fund shares (Investments) ................................................................. 53 Other accounts receivable ............................................................................................................. 54

2.3.2 State government and Union Territories including social security .................................... 54 Liabilities ............................................................................................................................................... 54

Debt Securities (Market Loans) ................................................................................................... 54 Loans (Borrowings) ........................................................................................................................ 54 Provident funds ............................................................................................................................... 55

Financial Assets .................................................................................................................................... 55 Currency and deposits ................................................................................................................... 55 Loans and Advances ....................................................................................................................... 55 Investments (Debt and Equity) .................................................................................................... 55

2.3.3 Local government including social security ............................................................................ 56 2.4 Rest of the World .......................................................................................................................... 56 2.5 Household and Non-profit Institutions serving Household Sectors ....................................... 57 List of Formats ......................................................................................................................................... 58

Format 1: List of Financial Instruments adopted in the Flow of Funds Accounts ...................... 58

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Abbreviations

ACU Asian Clearing Union

ADB Asian Development Bank

ADR American Depository Reserve / Asset Development Reserve

BIS Bank for International Settlements

BRBNMPL Bharatiya Reserve Bank Note Mudran Private Limited

BSR Basic Statistical Returns

CAG Comptroller and Auditor General of India

CGA Controller General of Accounts

CICB Central Industrial Cooperative Bank

CR Contingency Reserve

CSO Central Statistics Office

CFRA Combined Finance and Revenue Accounts, CAG

CGRA Currency and Gold Revaluation Account

CPSE Central Public Sector Enterprises

DBR Department of Banking Regulation, RBI

DCCB District Central Cooperative Bank

DCBR Department of Cooperative Banking Regulation, RBI

DEPR Department of Economic and Policy Research, RBI

DFM Division of Financial Markets, DEPR, RBI

DGBA Department of Government and Bank Accounts, RBI

DICGC Deposit Insurance and Credit Guarantee Corporation

DITF Division of International Trade and Finance, DEPR, RBI

DMC Division of Money and Credit, DEPR, RBI

DNBR Department of Non-Banking Regulation, RBI

DPE Department of Public Enterprises, MHIPE, GoI

DSIM Department of Statistics and Information Management

EEA Exchange Equalisation Account

EFC Economic and Functional Classification of the Union Budget

EPFO Employees Provident Fund Organisation

ESOP Employee Stock Options

EXIM Bank Export Import Bank of India

FAD Fiscal Analysis Division, DEPR, RBI

FCA Foreign Currency Assets

FIDD Financial Inclusion and Development Department, RBI

FSB Financial Stability Board

FSS Farmers‘ Service Society

GoI Government of India

ICB Industrial Cooperative Bank

IDBI Industrial Development Bank of India

IFCI Industrial Finance Corporation of India

IIFI Industrial Investment Bank of India

IMF International Monetary Fund

IRA Investment Revaluation Account

IRDAI Insurance Regulatory and Development Authority of India

JLG Joint Liability Groups

LAB Local Area Bank

LAMPS Large Scale Adivasi Multi-purpose Societies

LIC Life Insurance Corporation

MCA Ministry of Corporate Affairs, GoI

MHIPE Ministry of Heavy Industries and Public Enterprises, GoI

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MFSM Monetary and Financial Statistics Manual

MFSCG Monetary and Financial Statistics Compilation Guide

MOSPI Ministry of Statistics and Programme Implementation, GoI

MPD Monetary Policy Department

NABARD National Bank for Agriculture and Rural Development

NAS National Accounts Statistics

NBFC-D Non-Banking Finance Companies – Deposit taking

NBFC-NDSI Non-Banking Finance Companies – Non-Deposit taking Systemically Important

NGO Non-Government Organisation

NHB National Housing Bank

NHC (LTO) National Housing Credit (Long Term operations) Fund

NIC (LTO) National Industrial Credit (Long Term Operations) Fund

NPS National Pension System

NSC National Savings Certificate

OCVA Other Changes in Value Account

OFI Other Financial Institutions

PAC Primary Agricultural Cooperative Credit Society

PCARDB (PLDB) Primary Cooperative Agriculture and Rural Development Bank (earlier known as Primary Land Development Bank)

PCB Private Corporate Business sector

PFC Power Finance Corporation

PFM Pension Fund Manager

PFRDA Pension Fund Regulatory and Development Authority

PPF Public Provident Fund

PSE Public Sector Enterprises

RBI Reserve Bank of India

RCF Report on Currency and Finance, RBI

REC Rural Electrification Corporation

ROW Rest of the World

RRB Regional Rural Bank

RTP Report on Trend and Progress of Banking in India, RBI

SBI State Bank of India

SCARDB (SLDB) State Cooperative Agriculture and Rural Development Bank (earlier known as State Land Development Bank)

SCBs Scheduled Commercial Bank

SEB State Electricity Board

SEBI Securities and Exchange Board of India

SFC State Finance Corporations

SICB State Industrial Cooperative Bank

SIDBI Small Industries Development Bank of India

SIDC State Industrial Development Corporation

SIIDC State Industrial Infrastructure Development and Investment Corporation

SNA System of National Accounts

SPV Special Purpose Vehicles

SPSE State Public Sector Enterprises

StCB State Cooperative Bank

STB Statistical Tables Relating to Banks in India, RBI

SWIFT Society for Worldwide Interbank Financial Telecommunication

UCB Urban Cooperative Bank

UFA Union Finance Accounts, CGA

UTI Unit Trust of India

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A. Introduction

1. Overview

1. The objective of this Manual is to provide a comprehensive guide on the extant

methodology adopted for the compilation of the Flow of Funds (henceforth, FOF)

Accounts for the Indian economy. The Manual is a supplement to the Report of

the Working Group on the compilation of FOF Accounts, 2015 (Chairman: Shri

Deepak Mohanty). All the recommendations of the Working Group that are

implementable at the present juncture have been incorporated in the Manual.

2. The Manual would be updated on a periodic basis taking into account evolving

changes in the national accounting framework and new data/data sources in line

with the remaining recommendations of the Working Group. In view of this, this

Manual and the subsequent revisions would be released as a web version.

3. It may be recalled that the Reserve Bank of India (RBI) is entrusted with the

compilation of the annual FOF accounts on a ‗from whom-to-whom‘ basis and the

RBI has, since 1964, published the FOF accounts for the Indian economy from

the year 1951-52 onwards. The FOF accounts for India owe their origin to a

suggestion of Sir C.D. Deshmukh, the then Union Finance Minister, in 1955. In

1956, the CSO initiated preparatory work along with the RBI. In 1959, Professor

H. W. Arndt of the University of Australia carried out a study in consultation with

CSO, Ministry of Finance and RBI, on FOF accounts. The memorandum entitled

''Financial Flows in the Indian Economy 1951-52 – 1957-58'', prepared by Prof.

Arndt was discussed by representatives of the CSO and the RBI. They, in turn,

referred the issue to a Working Group on Flow of Funds (Chairman: Shri P. C.

Mathew) to formulate proposals for further work in this direction.

4. The Mathew Working Group took note of statistics then available and the

important work done by Prof. H.W. Arndt and suggested a model set of accounts

to be adopted. The compilation of the detailed FOF accounts for the Indian

economy was then initiated in 1959 under the joint auspices of the Central

Statistics Office (CSO) and the RBI. The Report of the Mathew Working Group,

published in 1963, presented a consolidated FOF accounts for the year 1957-58.

Subsequently, the RBI developed the work further and published the detailed FOF

accounts since December 1964 starting with the data from 1951-52 onwards. The

sectoral classification and financial instruments covered were in line with the

recommendations of the Mathew Working Group. Since then, these accounts are

being published periodically in the monthly RBI Bulletin with the scope of the

accounts extended over the years either by way of coverage, i.e., inclusion of

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additional sub-sectors or by the use of more refined methods of estimation and

classification of sub-sectors. 2

5. A Manual on the methodology of compilation of the FOF was published as a

supplement to the December 1988 issue of the Reserve Bank of India Bulletin

(henceforth, the 1988 Manual). This was followed by subsequent changes

regarding certain data sources and methodology of estimation which were

published along with the FOF articles in the January 1991 and January 1992

issues of the RBI Bulletin. In March 2007, the RBI prepared a ‗Manual on

Financial and Banking Statistics‘ on the recommendation of the Steering

Committee set up by the Ministry of Statistics and Programme Implementation,

Government of India. The objective of this reference manual was to provide a

methodological framework for compilation of statistical indicators, encompassing

various sectors, including the FOF accounts apart from monetary statistics,

banking statistics, external sector statistics and fiscal sector statistics,, published

by the RBI. Subsequently, the High-Level Committee on the Estimation of Savings

and Investment (HLC) (Chairman: Dr. C. Rangarajan), 2009 also made some

recommendations for improving the compilation of the FOF accounts. Some of the

recommendations of the HLC have already been incorporated in the compilation

methodology of FOF in subsequent years.

6. Internationally, the standards for preparing macroeconomic statistics including the

detailed flow of funds accounts have evolved over the years with the System of

National Accounts (SNA)3 being the internationally agreed standard set of

recommendations on how to compile measures of economic activity. The SNA

describes a coherent, consistent and integrated set of macroeconomic accounts

in the context of a set of internationally agreed concepts, definitions,

classifications and accounting rules. The SNA is intended for use by all countries,

having been designed to accommodate the needs of countries at different stages

of economic development. It also provides an overarching framework for

standards in other domains of economic statistics, facilitating the integration of

these statistical systems to achieve consistency with the national accounts.

7. The standards for preparing macroeconomic statistics changed significantly

following the publication of the 1993 SNA, which set out the overarching

conceptual framework for all macroeconomic statistics. The 1993 SNA

incorporated two significant enhancements: the full integration of stocks (balance

sheets) and flows, and a complete sets of accounts covering production, income,

2 Reserve Bank of India (1967), ‘Financial Flows in the Indian Economy - 1951-52 to 1962-63’, RBI

Bulletin, March. 3 Published jointly by: Commission of the European Communities—Eurostat, IMF, Organization for Economic Cooperation and Development (OECD), United Nations (UN), and World Bank (1993).

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consumption, saving, investment, and financial activities for sectors of the

economy as well as for the economy as a whole. The 2008 SNA4 is an update on

the 1993 SNA which takes into account new developments in economic activities

and analysis since 1993.

8. In the case of the FOF accounts of the Indian economy, it may be mentioned that

the sectorisation and the instruments adopted as per the existing methodology

partially match with the SNA‘s sectorisation and instruments. However, the Indian

FOF accounts, as per the existing methodology, differ from the SNA in some

aspects, namely:

a. the (opening and closing) balance sheets are not published in the Indian

FOF accounts.

b. the Indian FOF accounts does not segregate the financial flows - period-

to-period changes in the outstanding amounts of financial assets and

liabilities - into transactions, revaluations, and other changes in the

volume of assets (OCVA),

c. the Indian FOF accounts presents only the consolidated tables wherein

the intra-sector transactions are netted out;

d. the sectorisation in the Indian FOF accounts does not give the

disaggregation of institutional units in terms of public, private and

foreign companies for the financial and non-financial corporations;

e. In the financial corporations sector, the Indian FOF accounts do not give

the disaggregation in terms of deposit-taking and non-deposit taking

financial corporations.

f. As regards financial instruments, the Indian FOF accounts do not give the

break-up of ‗investment‘ into debt and equity, does not capture , financial

derivatives and employee stock option (ESOPs), and does not give the

break-up of debt securities and loans in terms of short-term and long-term.

g. In addition to balance sheets, data for the FOF accounts are also collected

through special returns from the institutional units/regulators.

9. In this backdrop, the RBI constituted a Working Group on the compilation of Flow

of Funds of the Indian Economy chaired by Shri Deepak Mohanty, Executive

Director, RBI to review the methodology of compilation of the FOF accounts for

the Indian economy. The Working Group reviewed the existing methodology of

compilation of the Indian FOF accounts as well as international best practices

including the SNA system and examined the feasibility of aligning the Indian FOF

4 The SNA, 2008 can be accessed at the link http://unstats.un.org/unsd/nationalaccount/sna2008.asp .

http://unstats.un.org/unsd/nationalaccount/sna2008.asp

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accounts with the international best practices to the extent possible at the current

juncture taking into account availability of data. As mentioned earlier, this Manual

incorporates the recommendations of the Working Group that are currently

implementable.

2. Institutional arrangements

10. The RBI is responsible for preparing the annual FOF accounts for the Indian

economy. In the RBI, the National Accounts Analysis Division (NAAD) in the

Department of Economic and Policy Research (DEPR) does the compilation of

the FOF accounts sourcing the data - from various Government of India agencies,

namely the Central Statistics Office (CSO) in the Ministry of Statistics and

Programme Implementation (MOSPI), Ministry of Corporate Affairs (MCA),

Ministry of Heavy Industries and Public Enterprises (MHIPE), from various

financial institutions/market regulators, viz., IRDAI, NABARD, NHB, PFRDA,

SEBI, SIDBI, other Departments in RBI, namely DBR, DGBA, DSIM, DNBR,

FIDD, DCBR and various regional offices, other Divisions in DEPR [which include

the Division of Financial Markets (DFM), Division of International Trade and

Finance (DITF), Division of Money and Credit (DMC), and Fiscal Analysis Division

(FAD)] as well as from individual corporations, such as State Electricity

Boards/Departments/Power Generation, Transmission and Distribution

Companies, etc.

11. The methodology for the compilation of the FOF is the responsibility of the RBI

which is, however finalised in close coordination with the Central Statistics Office

(CSO) in the Ministry of Statistics and Programme Implementation (MOSPI).

4. Institutional Units

12. The new methodology of compilation of FOF accounts for the Indian economy

would align the grouping of institutional units into various sectors along the lines of

SNA 2008 to the extent feasible (see Chart below).

13. However, coverage of the institutional units would depend upon the availability of

data. It may be mentioned that, at the current juncture, consolidated data

pertaining to Non-Profit Institutions (NPIs) serving households are not readily

available and hence the financial flows of these institutions are not separately

reported.

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5. Institutional Sectors

14. As recommended by the Working Group on Compilation of the FOF Accounts of

the Indian Economy, 2015, the list of institutional sectors, sub-sectors and the list

of institutional units that would be covered in the FoF accounts of the Indian

economy are given in the Table 1 below. This sectorisation is generally in line with

the 2008 SNA.

Table 1: Sectorisation of the Indian FOF Accounts

S.No. Sector (SNA Code)

Sub-sector List of Institutional Units

1 Non – Financial Corporations

Non-Government Non-Financial Companies

1. Public Limited Companies 2. Private Limited Companies 3. Power sector utilities (and

State Electricity Boards)

Government Departmental and Non-Departmental Commercial Undertakings

1. Central and State Public Sector Enterprises

2. Port Trusts

Cooperative non-credit societies

1. Cooperative non-credit societies

2 Financial Corporations

Central Bank Reserve Bank of India

Deposit-taking corporations, except the central bank

1. Scheduled Commercial Banks

Institutional Units

householdslegal and

social entities

Corporations

Non-Financial

Financial

Government units

Non-profit institutions

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a. State Bank of India (SBI) and associates

b. Public Sector Banks (including IDBI Bank)

c. Regional Rural Banks d. Old Private Sector

Banks e. New Private Sector

Banks f. Foreign Banks

2. Primary/Urban Cooperative Banks (UCBs)

3. State Cooperative Banks (StCBs)

4. District Central Cooperative Banks (DCCBs)

5. Deposit accepting primary (agricultural and non-agricultural) credit and non-credit societies

6. SCARDBs and PCARDBs 7. Deposit-taking NBFCs

(NBFC-D) 8. Deposit-taking HFCs 9. Local Area Banks

Mutual Funds 1. Mutual Funds a. Money Market Funds

(MMF) b. Non-MMFs

Other Financial intermediaries, except insurance corporations and pension funds

1. Non-Deposit taking NBFCs (systemically important and others)

2. Non-Deposit taking HFCs 3. Non-Deposit taking primary

cooperative credit societies 4. All India Financial Institution

(NABARD, EXIM Bank) 5. State Financial Corporations

(SFCs) 6. State Industrial Development

Corporations (SIDCs) 7. State Industrial Infrastructure

Development Corporations (SIIDCs)

8. IFCI, IDFC, REC, PFC, IFCI Venture Capital Funds

13

Limited, Indian Renewable Energy Development Agency Limited (IREDA), India Infrastructure Finance Company Limited (IIFC), Indian Railway Finance Corporation (IRFC), NCDC, NABARD, NHB, EXIM Bank, SIDBI, Industrial Investment Bank of India, SBI DFHI and SBI Capital

Financial Auxiliaries Insurance brokers, loan brokers, share brokers, floatation corporation, Asset Management Companies, Securities Trading and Clearing Corporation (STCL), Companies of Pension Funds, Companies engaged in Foreign Exchange activities depending on data availability

Captive Financial Institutions and Money Lenders

Holding Companies, Special Purpose Vehicles (SPVs), Companies in Financial Activities, Money lenders, Pawn brokers, etc. depending on data availability

Insurance Corporations 1. Life Insurance Companies a. Public b. Private

2. General Insurance Companies (including Health Insurance and Reinsurance companies)

a. Public b. Private

Pension Funds 1. Provident Funds (PF) i. Public Provident Fund ii. Employees Provident

Fund Organisation (EPF) iii. Non-Government

Provident Funds1 iv. Local Authorities P.F.

2. Pension Funds a. New Pension Scheme b. Non-Government

3 General Government

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Central Government including autonomous bodies

State Governments All the State Governments and Union Territories

Local Authorities Municipalities, Corporations, Rural Bodies, Local Institution

4 Households and NPISH Households and NPISH

5 Rest of the World Non-Residents transactions with residents

1. The Central Government and State Governments‘ Employees Provident Funds are included in the Central and State Government FOF accounts, respectively.

6. Financial Assets and Liabilities (Instruments)

15. As recommended by the Working Group on Compilation of the Flow of Funds

Accounts of the Indian Economy, 2014, the following financial instruments would

be covered in the FOF accounts for the Indian economy to the extent feasible

depending on the availability of data (Table 2).

Table 2: List of Financial Instruments covered in the FOF Accounts for the Indian Economy

Monetary Gold and Special Drawing Rights (SDRs)

Monetary Gold

SDRs

Currency and Deposits

Currency

Deposits

Debt securities

Loans

Equity and investment fund shares

Insurance, pension and standardised guarantee schemes

Other accounts receivable/payable

7. Sources of data

16. The source agencies/source documents for each of the institutional sectors in the

FOF accounts are given in the Table below.

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Table 3: Sources of data 5

Sector and sub-sector (SNA Code)

Source agency Source document (s)

Non-Financial Corporations

Public Limited Companies

RBI (DSIM), SEBI and Ministry of Corporate Affairs (MCA)

Private Limited Companies

RBI (DSIM), SEBI and MCA

Government Non-departmental commercial undertakings (NDCUs)

Ministry of Heavy Industries and Public Enterprises

Survey of Public Sector Enterprises (PSEs)

Power Utility Companies Respective power utility company


NABARD Statistical Statements relating to the Cooperative Movement in India, which is available with a time lag.

Financial Corporations

Central Bank RBI (DGBA, various regional offices)

1. RBI Statement of Affairs 2. Real Time Handbook of Statistics on

the Indian Economy (www.dbie.rbi.org.in)

Deposit-taking corporations, except the central bank

Commercial Banks

RBI (DSIM) FIDD

1. Form X returns (from DSIM) 2. Statistical Tables relating to Banks in India

(from DSIM) 3. Section 42 returns (from DSIM) 4. Form X returns for RRBs (from RPCD)

Local Area Banks RBI (DCBR)

Cooperative Banks

State Cooperative Banks

NABARD / RBI (DCBR)

1. FIDD Form IX return 2. Statistical Tables relating to Banks in India 3. Statistical Statements relating to the Cooperative Movement in India, which is available with a time lag.

District Central Cooperative Banks

NABARD/ RBI (DCBR)

Urban Cooperative Banks

DCBR, RBI

Deposit-taking Non- RBI (DNBR and

5 In cases where private databases are used, they would be indicated in the FOF accounts.

http://www.dbie.rbi.org.in/

16

Banking Finance Companies (NBFC-D)

DSIM)

Deposit-taking Housing Finance Companies (HFC-D)

National Housing Bank (NHB)

Mutual Funds Securities and Exchange Board of India (SEBI)

Other financial intermediaries, except insurance corporations and pension funds

Annual Reports of the respective institutions

Non-deposit-taking Non-Banking Financial Companies

RBI (DNBR)

Non-deposit-taking Housing Finance Companies

NHB

Insurance Corporations

IRDAI IRDAI Annual Report, LIC Annual Report

Pension Funds Respective Provident and Pension Funds

General Government

Central Government 1. Economic and Functional Classification of the Union Budget, 2. Union Budget documents, 3. Union Finance Accounts (UFA) (http://cga.nic.in/) 4. Combined Finance and Revenue Accounts (CFRA) (http://cag.gov.in/)

State Governments RBI (FAD) 1. State Budgets 2. Combined Finance and Revenue Accounts (CFRA)

Local Authorities MOSPI (CSO)

Households and Non-Profit Institutions serving Households

Rest of the World RBI (DITF) Balance of Payments Statistics (BoP)

8. Balancing the accounts

a) Consistency between financial and non financial accounts

17. Generally, statistical discrepancies between the financial and non-financial

accounts are observed. The reasons for the discrepancies could be on account of

the following, inter alia: different scheme of classification of units to a sector (or a

sub-sector), use of different sources in compiling the financial and non-financial

http://cga.nic.in/

http://cag.gov.in/

17

accounts, difficulties in identifying creditors of some financial assets, and revision

of accounts. The FOF accounts attempt to minimise the discrepancy between the

financial and non-financial accounts to the extent possible.

b) Stock/flow consistency

18. The 2008SNA/ ESA95 framework presents a full set of accounts so that for any

financial instrument and sector, changes between opening and closing balance

sheets are divided into financial transactions and "other flows". The "other flows"

cover changes in volume not resulting from a transaction between units and

changes resulting only from a change in prices of financial assets and liabilities

(including change in exchange rate), that is valuation change.

19. As a general rule, the method used for estimating financial transactions is the

"changes in stocks adjusted by information on other flows". However, direct data

on transactions is used when they are available. It is notably the case for net

issuance of securities where market information exists and is reliable, at least for

securities traded on an organised market. Purchases and sales of Mutual Fund

Shares are frequently available. Balance of Payments transactions are also an

example of "direct information".

20. In the Indian context, the financial flows in the FOF accounts of various sectors

(except the ROW sector) are and some parts of the Central and State

Government Sectors, obtained as the difference between the outstanding financial

assets/liabilities in two consecutive end-March positions. At present, the financial

flows obtained by differencing the two outstanding positions are not bifurcated into

transactions, revaluations (such as capital gains and losses and changes owing

to movements in the exchange rate) and other changes in volume account

(OCVA) such as write-off of loans.

c) Consistency checks/Control Totals

21. In order to maintain consistency in the financial flows across sectors in cases

when aggregate numbers are available from two different sources, the data that is

firmer is chosen. Furthermore, some aggregate flows, which are available for

certain sectors, are used as control totals, so as to ensure consistency with the

sum of the constituents, on which data are separately available (Table 3).

Table 4: Consistency checks and control totals

S. No

Sector/sub-sectors Source data and agency

Control Totals

Sources of Funds (Liabilities)

Uses of Funds (Financial assets)

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1 Non-Financial Corporations (PCB sector)

Non-Government Non-Financial Companies

Sample data from DSIM (RBI)

Data on Global Paid-up Capital (PUC) of all companies available with MCA is used as the control total for the total flow in equity.6


NABARD Statistical Statements relating to the Cooperative Movement in India, which is available with a time lag.

Power sector companies

Individual companies

Some items available in the report on ‗Performance of State Power Utilities‘ are: Equity, State Government Loans, Loans from FIs/Banks/Bonds, Other Loans, Grants towards capital assets, Consumer contribution, Creditors for purchase of power.

Not available

Non-Departmental Commercial Undertakings (NDCUs)

CPSE survey available on the website of the Department of Public Enterprises (DPE)

The CPSE Survey, includes certain public sector financial institutions (registered as NBFCs). The total liabilities and assets of these financial institutions are deducted to arrive at the total sources or uses of funds for the NDCUs.

2 Financial Corporations

a) Banking sector

RBI DGBA (RBI) Total liabilities as well as the instrument-wise break up are available as at end-March for the RBI

Total assets as well as the instrument-wise break up are available as at end-March for the RBI

Commercial Banks (excluding RRBs)

Returns from Scheduled commercial banks (e.g., Form X returns )/ Statistical Tables relating to Banks in India /

6 The shift to MCA21 database of the Ministry of Corporate Affairs would be explored.

19

Section 42 returns from DSIM (RBI)

RRBs Form X returns / NABARD

Total liabilities of RRBs as per FIDD data

Total assets of RRBs as per FIDD data

Cooperative banks

StCBs DCBR (RBI) / NABARD

Total Liabilities as per DCBR‘s Form IX returns data

Total Assets as per DCBR‘s Form IX returns data

DCCBs NABARD Total Liabilities as per DCBR‘s Form IX returns data

Total Assets as per DCBR‘s Form IX returns data

UCBs NABARD Total Liabilities as per DCBR data

Total Assets as per DCBR data

State Finance Corporations (SFCs)

SIDBI and respective SFCs

Total liabilities of all SFCs as at end-March

Total assets of SIDCs as at end-March

State Industrial Development Corporations (SIDC)

Respective SIDCs

Total liabilities of all SIDCs as at end-March

Total assets of SFCs as at end-March

State Industrial Infrastructure Development Corporations (SIIDC)

Respective SIIDCs

b) OFI

NBFCs DNBR and DSIM (RBI)

Total Liabilities as per RBI data

Total Assets as per RBI data

Insurance Companies

IRDAI Total liabilities of insurance companies as at end-March

Total assets of insurance companies as at end-March

Mutual Funds SEBI SEBI publishes data on Mutual Funds‘ total resource mobilisation (gross mobilisation), redemption and net inflows

Non-Government Provident Funds

CSO/Individual PFs

Data provided by the CSO as well as the individual PFs are used as control totals

HFCs NHB Total as given by NHB Total as given by NHB

4 Government

Central Union

20

Government Budget, Finance Accounts, CFRA

Economic and Functional Classification of Union Budget (EFC), the Combined Finance and Revenue Accounts (CFRA) of the CAG. State

Governments FAD (DEPR, RBI)

Local Authorities CSO The FOF accounts of this sector would be derived, to the extent possible, from the flows observed in the other sectors. *

5 Household and NPISHs

Various sources

Not available Not available

6 ROW DITF (DEPR, RBI)

Total sources and uses of funds as well as instrument-wise totals are derived from the BOP Statistics

* The availability of further data is being examined.

21

B. Compilation Guide

1. Total Economy

22. India‘s FOF accounts categorise the domestic economy into four major sectors,

namely, financial corporations, non-financial corporations, the general

government, and the ‗households and NPISH‘ as is the current practice globally.

23. The FOF accounts will publish both the non-Consolidated Tables wherein the

intra-sector transactions are reported and the Consolidated Tables wherein the

intra-sector transactions are netted out.

1.1 Non-Financial Corporations 24. This sector comprise of the following institutional units: 1. Non-Government Non-Financial Companies

a. Public and Private Limited Companies

b. Private Power Sector Companies

c. Private Port Trusts

d. Cooperative Non-Credit Societies

2. Government departmental and non-departmental Commercial Undertakings

a. Government departmental undertakings

b. Central and State Public sector enterprises

c. Port Trusts

d. State Electricity Boards/State Power Utilities

1.1.1. Non-Government non-financial companies 25. This sub- sector comprises all public and private limited companies registered in

India under the Indian Companies Act, 2013 (and the earlier Indian Companies

Act, 1956) and branches of foreign companies operating in India. Studies on

‗Finances of public / private limited companies‘ published periodically in the RBI

Bulletin, form the basic source for compilation of the accounts of this sub-sector.

26. These studies cover a sample of operating non-government non-financial public

and private limited companies.7 The company finance studies of the Bank cover

only a small sample of medium and large public limited companies and private

7 For details on operating companies, please see the articles on “Finances of Non-Government Non-Financial Public

and Private Limited Companies” published in the RBI Bulletin periodically.

22

limited companies whose audited Annual Reports and Accounts are received in

the Reserve Bank of India [DSIM],

27. The number of companies covered in the Bank‘s studies is revised/enlarged on a

quinquennial basis. As the studies include only limited number of companies, the

data presented therein are adjusted for the under coverage on the basis of the

indicator available for populations of the public and the private limited companies.

Total paid-up capital of these companies as on 31st March is used to get global

estimates for public and private limited companies. Further, in order to arrive at

global estimates, the sample data of each and every item (both financial and non-

financial) are blown-up using the blow-up factor arrived as the ratio of paid-up

capital of the global population to paid-up capital of the sample. The underlying

assumption in such blowing–up is that the relationship between the characteristics

(estimated) of the population and those of the sample companies is the same as

that of the paid-up capital of sample companies to the paid-up capital of the

population.

28. In order to ensure accuracy and consistency, after estimating the blown-up

numbers for a particular instrument, the number is compared with corresponding

flows in other sectors (such as the Commercial Banks sector or the ROW sector).

In case of wide variations, the Banking sector or the BOP sector number is used

as they are considered to be more firm data.

29. The FOF accounts of the non-government non-financial public and private limited

companies, as stated above, are based on the blown-up data of the sample

companies. As all the necessary details are not available from these studies,

these are supplemented with the information collected from the accounts of other

sectors as well as from records of the Bank (DSIM).8

Liabilities

Deposits

30. Deposits accepted by the companies from public are shown under ‗Long term

borrowing‘ are ‗Short-Term borrowings‘. Further, the deposits are segregated

under secured and unsecured. For the purpose of the FOF accounts, these public

deposits are treated as deposits raised from the household sector.

Debt Securities

31. The company finances information provides data on money raised through

bonds/debentures. In the absence of ownership details of these securities, the

8 Data from private databases are also used.

23

investments made by other sectors (mainly the financial corporations) in the debt

securities of non-financial corporations are used.

Loans (Borrowings)

32. Long-term borrowings include term loans (including loans from banks), deposits,

loan and advances from selected parties, long-term securities of finance lease

obligation and from ‗others‘. In addition, information relating to short-term

borrowings including that from banks is available.

Equity (Paid-up capital)

33. The studies on company finances provide information on shareholders‘ funds

which include (i) share capital and (ii) reserves and surplus.

34. The total share capital is segregated according to its ownership on the basis of

the sectoral accounts which report their investments in the shares of non-

government non-financial companies. The paid–up capital held by the household

sector is obtained as a residual, i.e., by deducting the investments of all

identifiable sectors from the total share capital of the companies.

Trade payables and other current liabilities

35. Trade payables include companies‘ purchases on deferred payment basis from

other non-government companies, government undertakings, partnership firms

and proprietorship firms and other business households. However, these

ownership details are not available in the Company Finance studies. A similar

item, ‗trade receivables‘ appears under assets which includes the sale of goods

on deferred payments basis to various parties such as, the other non-government

companies, government undertakings, partnership and proprietary concerns, the

details of which are also not available. In the absence of ownership particulars,

the intra-corporate trade transactions are excluded and the residual is taken as

the amount received from/paid to the household sector. The ‗other current

liabilities‘ and classified as ‗items not elsewhere classified‘ under the instruments

are ‗sector unidentified‘ for the sectoral allocation.

Reserves and Surplus

36. Reserves and surplus include different types of reserves, such as, capital reserve,

investment allowance reserve, sinking funds and other reserves. Capital reserve

includes profit/loss on sale of fixed assets and/ or investments, profits realised on

purchase of company‘s own debentures, profit on sale of forfeited shares, capital

redemption reserves, revaluation reserves (fixed assets), and premium on shares.

Hence, increase in capital reserve does not form part of the saving of the

companies. Increase in reserves (other than capital reserve) forms the saving of

the companies which is a non-financial transaction.

24

Provisions

37. Provisions include provision for taxation, other non-current provisions and other

current provisions. The companies also show ‗advance income tax paid‘ under

current assets. Increase in tax provision net of tax advance over the previous

year‘s closing balance forms part of the saving of the companies, whereas other

current provisions relate to provisions for contingencies and bonus to staff. They

are not included under saving but are shown as other non-financial capital

receipts.

Financial Assets

Currency and deposit

Cash and cash equivalents

38. Cash on hand are shown against this sub-head. As mentioned earlier for other

sectors, cash on hand is split into bank notes and government notes.

Deposit

39. Deposits with commercial banks, shown as balances with Banks in the Balance

sheets, cover the fixed, current and other deposit accounts.

Investments (Debt and equity securities)

40. Companies‘ investments are classified into non-current and current investments.

The former includes investment in equity instruments/shares, government or trust

securities, debentures/bonds, mutual funds and others. In the absence of any

details, the last category ‗other investments‘ is shown as sector unidentified.

Loans and advances

41. Both long-term and short-term loans and advances are shown under this head.

Loans to others are shown as ‗sector unidentified‘ as no details are available.

Long-term loans and advances include capital advance, security deposits, loans

to related parties and ‗others‘.

Other non current assets

42. These assets which appear under a separate head are classified as other items

not elsewhere classified under financial flows.

Non-Financial Assets

Net fixed assets

43. The increase in net fixed assets constitutes the net fixed capital formation of

these companies, which is a non-financial transaction. The company finances

25

data provides information relating to gross fixed assets, which include tangible

assets (such as land, buildings, plant and machinery, furniture, fixtures and office

equipments and others), capital work in progress and intangible assets, but these

details are not available on net basis.

Inventories

44. Inventories include stocks of raw materials and components, stores and spares

used by the company for the maintenance of its fixed assets, stocks of finished

goods, work-in progress and other inventories. The annual variation in stock is a

non-financial transaction.

2.2.2 Power Sector Companies and State Electricity Boards 45. Most of the State Governments have un-bundled the erstwhile State Electricity

Boards (SEBs) into one or more Power Generation, Transmission and Distribution

Companies. The necessary data for these companies and the existing SEBs are

obtained through special returns from these companies and supplemented with

their annual reports. The special returns provide the sectoral details of all the

financial assets and liabilities.

Financial Liabilities

Deposits

46. The Annual Reports of the State Power Utilities/electricity boards provide details

of deposits (security deposits from contractors, consumers‘ and meter security

deposits, retention money and other miscellaneous deposits) received by these

firms. As the ownership details of fixed deposits and consumers‘ security

deposits, received by these utilities/boards are not available, the amounts are

shown as of ‗Household Sector‘ for sectoral presentation.

Debt securities (bonds and debentures)


of their money raised through bonds and debentures. The category-wise

particulars of bonds and debentures, issued by them, are not available in their

reports. These details are worked out from the investing sectors‘ accounts. The

bonds and debentures are subscribed mainly by the commercial banks, LIC,

financial corporations, non-government provident fund authorities and state

governments. The state governments‘ investment is derived by deducting other

sectors‘ investment in the bonds from the total amount of bonds issued.

Loans (Borrowings)


of their borrowings from Banks and Others. The borrowings from others include

26

that from state governments, central governments, financial corporations, the LIC

and other insurance companies, etc. Other details are worked out from the

lending sectors‘ accounts.

Other accounts payable

Trade payables

49. Trade payables include amount due to micro and small enterprises and others

including amount payable for purchase of power. The trade credit includes

creditors on open account, sundry creditors, dues payable to contractors and

suppliers of stores, etc. However, the particulars of the parties, to whom the

amounts are payable, are not available. Under assets side, similar items, viz.,

sundry debtors for electricity supplied, debtors for amount paid on account of

contracts in course of completion, debtors for sale and hire purchase, advances

against supply of materials, sundry debtors for temporary service connection form

trade receivable. The sectoral details of the trade receivables are available which

is used to allocate trade payable (net of trade receivables) to government, private

corporate sector and households.

Other liabilities (current and non-current)

50. The annual reports and accounts of the State Electricity Boards/State power

utilities (SEBs/SPUs) present a variety of items under other current liabilities.

These items which have the bearing of a liability to others, such as interest, bills

payable, etc., are considered as financial transactions. The employees‘ provident

fund is also shown under other current liabilities by many of the SEBs/SPUs while

a few others show this under the head of provisions. For the compilation of

accounts, the provident fund amount is excluded from the liabilities. To the extent

possible, the amount of other liabilities (financial part) is shown against different

sectors.

Reserves, provisions and capital transfers

51. All types of reserves and other funds are non-financial items and represent

accumulated saving of the SEBs/SPUs. The increase in taxation provision net of

advance tax payments, is the saving of the SEBs/SPUs. Capital transfers

comprise revenue subsidy/grant from state governments.

Financial Assets

Currency and deposits

Currency (Cash on hand)

52. Data on cash on hand are available directly in the basic source.

27

Deposits

53. Balances at banks include the deposits in current and fixed deposit accounts with

commercial banks and co-operative banks.

Loans

54. This item comprises loans and advances to employees, contractors, suppliers and

others. Loans to employees are classified as loans to the household sector.

Investments (Debt and Equity)

55. The annual reports provide the details of investments of the SEBs/SPUs.

Other accounts receivable (Other assets)

56. Other assets include interest accrued, sundry receivable, receivables from state

government and other agencies and certain non-financial transactions. Financial

items of other assets are identified under different sectors depending upon the

availability of details in the annual reports. The non-financial items of other assets

are shown as other capital transfer payments under non-financial flow accounts.

Non-financial items

57. Net fixed assets, inventories, capital transfers, viz. grants, subsidies, advance of

tax payment and other assets (non-financial) appear under non-financial flows.

The items such as deferred revenue expenditure and net revenue and

appropriation account, appearing under other assets, are deducted from reserve

funds to derive the saving of the SEBs/SPUs. Net fixed assets and inventories

together form the physical assets and the additions made therein during the year

represent the capital formation (net) of the electricity boards/SPUs.

2.2.3 Co-operative non-credit societies 58. The co-operative non-credit societies comprise primary marketing and processing

societies, co-operative sugar factories, cotton ginning and pressing societies, milk

supply unions and societies, fisheries societies, farming societies, irrigation

societies, consumers‘ co-operative stores, housing societies, weavers‘ societies,

spinning mills, dairy cooperative societies, poultry union and societies and multi-

unit societies.

59. The Statistical Statements on the Cooperative Movement in India, which is the

primary source for these Cooperatives, is published with a considerable lag.

Therefore, the FOF accounts for these societies for the years under review are

estimated by applying the same growth rate as observed under the relevant

financial instruments of the DCCBs as per the Form IX return of the DCBR, RBI.

These estimates are revised as and when the Statistical Statements of the

particular year are released by NABARD.

28

2.2.4 Port Trusts 60. The FOF accounts of this sector are prepared by obtaining special returns from

the major port trusts, both in the public and private sector. The special returns

provides the sectoral details of all the financial assets and liabilities.

Liabilities

61. The major sources of finance of public sector port trusts are in the form of

borrowings and other financial liabilities (for example, sundry creditors) which

arise in the course of business. Their borrowings are mainly from the central

government.

62. Along with the reserves and other funds, the balance sheet of Port Trusts

presents provident fund contributions of the employees. Since the non-

government provident funds(other than state provident funds) is a separate sub-

sector, the provident fund data of the port trusts are excluded from the liabilities

side as well as from the assets side and shown in the provident fund sub-sector.

63. The change in reserves and other funds including provisions for depreciation,

form the gross saving of the trusts. But, ‗net deficit‘, and ‗uncovered revenue

deficit‘ have been presented under ‗other assets‘, which generally indicate

accumulated losses. Therefore, these two items are adjusted before deriving the

net/gross saving of the port trusts.

Assets

64. Under the assets, investments made out of provident funds contributions are

shown separately. As stated earlier, this investment account is separated from the

assets. In practice, provident fund contributions shown in the liabilities do not

match with the investments from the fund given under assets. The difference

between these two sets of figures is adjusted under the item ‗bank balances‘.

65. Investments made out of general fund and other funds (other than provident fund

account) are in the form of securities of financial institutions, private corporate

sector and government, and these details are available in the annual reports. The

data on cash in hand and their deposits (current and fixed) with banks and other

financial assets (such as sundry debtors and accrued interest) are the remaining

financial assets of the port trusts. The deposits are treated as deposits with

commercial banks. In the case of other financial assets which include interest

accrued and such other items, no sectoral details are available.

66. Plant and machinery, premises, furniture and other fixed assets are presented on

gross basis inclusive of depreciation in the annual reports. Therefore, rise in these

assets would mean gross fixed capital formation of the port trusts. Similarly, the

increase in the stores and raw materials maintained by them would be change in

inventories. As sated earlier, the ‗net deficit‘ and ‗uncovered revenue deficit‘ are

29

covered under ‗other assets‘ and these are deducted from reserves to derive the

saving of the port trusts.

2.2.5 Government Non-departmental non-financial undertakings

67. This sub-sector covers all Government non-departmental non-financial companies

owned either singly or jointly by central, state or local governments. In the case of

the companies owned by the central government, the data on their assets and

liabilities are available in the annual publication titled Public Enterprises Survey

(PES) which is published by the Department of Public Enterprises (DPE), Ministry

of Heavy Industries and Public Enterprises (MHIPE), Government of India on its

website.

68. This publication covers enterprises under construction, and running enterprises,

which are promotional, financial and non-financial companies by their activity.

However, the financial companies are not included in this sub-sector as they are

covered under the ‗Financial Corporations‘ sector.

69. The State Public Sector Enterprises are (i) companies under section 617 of

companies Act, 1956, (ii) Statutory companies established under the act of state

legislature (iii) any other companies not categorised by the state government.

70. The Department of Public Enterprises published the first National survey of State

level Public Enterprises (2006-07) in August 2009 and the second survey for

2007-08 in 2012. Due to the time lag in availability of data from the source, the

data on SLPEs are compiled from the CAG reports or data disseminated by state

governments. The methodology for central and state government companies is

given below.

(i) Central and State Government Companies

Liabilities

Loans (Borrowings)

71. The sectoral borrowing in respect of CPSEs, are drawn from a subsidiary

statement on details of short-term and long-term borrowings from (i) central

government, (ii) state governments, (iii) holding companies, (iv) banks, (v) foreign

parties and (vi) others.


72. In the case of CPSEs, Statement I of the PES, Vol. I, provides the balance sheet

data for running enterprises and companies under construction. The ownership

details of the paid-up capital are available in subsidiary statement of the PES, Vol.

I, against the following heads: (i) central government, (ii) state governments, (iii)

holding companies, (iv) financial institutions (Indian), (v) foreign parties, (vi)

30

employees and (vii) others (Indian). The data on financial institutions are not given

separately for banking and other financial institutions. Therefore, the equity

holding of banks in NDCUs as per the FOF accounts of Scheduled Commercial

Banks are shown here. The remaining are shown under non-banking financial

institutions.

Current and non-current liabilities (other than borrowings) and provisions

73. The current and non-current liabilities (other than short-term borrowings) are

further divided into (i) trade payables and, (ii) other long term liabilities, (iii)

provisions (long-term and short-term) and deferred tax liability. The taxation

provision and other short and long term provisions included under ‗provisions‘

appear under non-financial flows.

Reserves and Surplus

74. The item ‗Reserves and Surplus‘ includes general and other free reserves,

specific reserves and balance from profit and loss account. The changes in these

funds represent the saving of the companies. While, change in tax provision net of

advance tax payments is added, changes in ‗deficit‘ and ‗deferred revenue

expenditure‘ appearing under assets side of central government companies are

deducted from change in reserves.

Financial Assets

Cash and bank balances

75. Cash in hand is the currency held by the companies while bank balances,

including fixed deposits with commercial banks, are shown as deposits with

commercial banks. In the case of CPSEs, the break-up of cash in hand and

balances with commercial banks is not available. The cash

Loans (Loans and advances, Trade receivables and other assets)

76. Details of loans and advance extended by the CPSEs are not available. In the

absence of any loan details, the total amount under this head, other than loans to

subsidiary and holding companies, is shown under unclassified sector. The

amount under trade receivables is shown as trade debt and is not allocated to any

identifiable sector for want of details. Other assets are shown under ‗other items

not classified elsewhere‘ for instrument-wise classification and ‗unclassified‘ for

sectoral presentation.

77. The PSE Survey gives data on inventories and gross fixed assets i.e., fixed

assets and inventories inclusive of depreciation. Fixed assets are also shown net

of depreciation. The total fixed assets of CPSEs also capital work-in progress,

which includes capital advances to suppliers/contractors and intangible assets

31

under development. The PSE Survey provides data on ‗deficit‘ (accumulated) and

‗deferred revenue expenditure‘ in the case of CPSEs and is shown as other

capital transfer payments. Changes in these items are deducted from the change

in reserves and surplus to arrive at the net saving of these companies.

1.2 Financial Corporations

78. The Financial Corporations sector would now comprise the institutional units as

given in Table 1.

1.2.1 Central Bank – the Reserve Bank of India

79. The Statement of Affairs of the RBI prepared by DGBA and also published in the

RBI‘s Handbook of Statistics on the Indian Economy gives the assets and

liabilities of the RBI as on March 31st. This data forms the basic source for the

compilation of the FOF accounts of the RBI.

Liabilities


Currency (Notes issued)

80. This item includes all notes issued by the Government of India up to April 1935

and by the RBI thereafter (referred to as bank notes). One rupee notes and coins

issued by the Government of India since July 1940 (referred to as government

notes) are considered as rupee coins. These coins are the liabilities of the

Government of India and those held by the Reserve Bank are the assets of the

Bank. These do not, therefore, form part of ‗notes in circulation‘ presented in RBI

accounts. Thus, ‗notes issued‘ comprise bank notes (i) held in Banking

Department of the RBI, and (ii) in circulation (i.e. bank notes outside the RBI).

81. Bank notes and rupee coins in circulation are held by different institutions/sub-

sectors, such as banks, co-operative societies, financial corporations, insurance

companies, non-government and government companies, government treasuries,

the railways, the posts and telegraphs in the form of petty cash, and households

who maintain the cash balances with them for day to day transactions and also as

a part of their saving. As there is no single source which gives data on cash

holdings of these different institutions/sub-sectors, their cash on hand, as reported

in their accounts, is made use of to derive the sectoral distribution of notes and

rupee coins in circulation.

82. However, as the cash held by different institutions/sub-sectors includes both the

bank notes and the government notes, the break-up of these notes into bank

32

notes and others for each sub-sector is made by assuming that their ratio to one

another is the same as indicated in the data on total ‗notes in circulation‘ and total

‗circulation of rupee coins and small coins as on 31st March of the respective year.

The sectoral distribution of bank notes worked out on the above basis is shown

under this item. Data on cash holdings of each institution/sub-sector, except the

household sector, are obtained from their respective balance sheets/annual

reports. Cash holdings of the Household Sector are, however, derived by

deducting cash held by different identifiable institutions/sub-sectors from the total

currency in circulation excluding government notes.

Deposits

83. Deposits with the Bank are shown against the following heads. (a) Government:

(i) Central Government, (ii) State Governments, (b) Banks: (i) Scheduled

Commercial Banks, (ii) Scheduled State Co-operative Banks, (iii) Other Banks,

and (c) Others.

84. The category ‗other banks‘ includes deposits of (i) non-scheduled commercial

banks, and (ii) central and primary co-operative banks which have been permitted

to open accounts with the Bank. In the absence of the availability of separate

details for the non-scheduled commercial banks and the co-operative banks, the

deposits of the category ‗other banks‘, are classified under commercial banks.

85. The last category – ‗others‘ – include (i) rupee deposits from Foreign Central

Banks and Foreign Financial Institutions, (ii) Deposits from Indian Financial

Institutions, (iii) Deposits placed by Mutual Funds, (iv) Accumulated Retirement

Benefits – (a) Provident Fund and (b) Gratuity and Superannuation Fund, and (v)

Miscellaneous deposits, viz., balances of Clearing Corporation of India Ltd,

Primary Dealers, Employee credit societies, etc., and sundry deposits. These

deposits are respectively categorized under the sectors ROW, Other Financial

Intermediaries, Mutual Funds, and Pension/Provident Funds. After estimating the

sectoral figures, the deposits held under Account No. I of IMF with the Bank is

deducted from the deposits estimated against the Rest of the World sector and

shown separately as loans from the IMF. This modification is made in the

accounts of the RBI sub-sector because the above transactions in the Rest of the

World sector‘s accounts are shown as loans to the official sector (RBI). Thus, the

deposits with the Bank are classified into the various FOF sectors.


Equity

33

Unlisted shares (Paid-up capital)

86. The paid-up capital of the Bank, which is entirely contributed by the Government

of India, has remained constant at `5 crore since 1948. As there is no change in

the amount so far, the flow on this account is nil.


Bills Payable

87. ‗Bills payable‘ include (a) outstanding Demand Drafts (DD) issued between offices

of the RBI (b) outstanding payment orders (PO) issued by the RBI for local

payments, and (c) outstanding balance in the remittance clearance account,

representing the remittances issued as per the erstwhile Remittance Facility

Scheme – between (i) treasury agencies, (ii) treasury agencies and banks, (iii)

treasury agencies and the RBI, (iv) agency banks and the RBI, etc. A special

return as on 31st March from the regional offices of the RBI provides the

particulars of bills payable into (1) outstanding balances DDs issued between

offices of the RBI and (2) outstanding balances of (a) POs issued by the RBI

offices for local payment and outstanding remittances in the Remittance

Clearance Account. The amount of ‗bills payable, as given in the Statement of

Affairs, is allocated to different sectors on the basis of the sectoral pattern derived

from the special return. It may be mentioned here that while intra-RBI transactions

are shown against category (1), the sectoral details are shown under category (2).

While both the categories would be shown in the non-Consolidated Table, only

category 2 would be reported in the Consolidated Table.

Other liabilities

88. Internal reserves and provisions of the RBI are major components of ‗other

liabilities‘. While Contingency Reserve (CR) and Asset Development Reserve (ADR)

form the RBI‘s internal reserves, having been provided as normally provided by banks,

the remaining components of ‗Other Liabilities‘, such as, Currency and Gold

Revaluation Account (CGRA), Investment Revaluation Account (IRA) and Exchange

Equalisation Account (EEA) and provision for outstanding expenses, are in the nature of

provisions as they represent unrealised gains/losses. The remaining components of

‗other liabilities‘ include surplus transferable to the Government of India and

miscellaneous.

89. The CR and the ADR reflected in ‗Other Liabilities‘ are in addition to the ‗Reserve

Fund‘ held by the RBI as a distinct balance sheet head. The Contingency Reserve (CR)

represents the amount set aside on a year-to-year basis for meeting unexpected and

unforeseen contingencies, including depreciation in the value of securities, and risks

arising out of monetary/exchange rate policy operations. In order to meet the needs of

34

internal capital expenditure and make investments in subsidiaries and associate

institutions, a further sum is provided and credited to the ADR, which was created in

1997-98.

90. Unrealised gains/losses on valuation of Foreign Currency Assets (FCA) and gold

due to movements in the exchange rates and/or price of gold are not taken to the Profit

and Loss Account but instead booked under the CGRA. Unlike the CR, which is created

by apportioning realised gains, the CGRA is not a reserve account as it represents the

accumulated net balance of unrealized gains and losses arising out of valuation of FCA

and gold. As CGRA balances mirror the changes in prices of gold and in exchange rate,

its balance varies with the size of asset base and volatility in the exchange rate and

price of gold. The RBI values foreign dated securities at market prices prevailing on the

last business day of each month and the appreciation/depreciation arising there from is

transferred to the IRA. The unrealised gains/losses arising from such periodic

revaluation are adjusted against the balance in IRA. The balance in the EEA represents

provision made for MTM losses on forward commitments mainly arising out of

intervention operations.

91. The ‗Miscellaneous‘ item is a residual head including sub-accounts such as

balances payable on account of leave encashment, reserve for interest earned on

securities earmarked for the employee funds, the value of collateral held as margin for

repo transactions and medical provisions for employees.

92. For the purpose of the FOF Accounts, only ‗Other Liabilities (miscellaneous)‘

would be shown. The extent of financial and non-financial nature of these transactions

is, however, not known as the details of these components are not available. However,

an attempt is made to exclude the amount of non-financial transactions to the maximum

possible extent, by netting similar items on the assets side.

93. The item ‗other assets‘ includes (a) certain financial items, such as, housing

loans to employees, loans for purchase of cars and motor cycles to employees, (b) non-

financial items such as adjusting account, charges account, suspense account, demand

drafts received for realization account, agency charges account, exchange account and

dead stock account. Items under (b) would also include certain financial transactions,

for which no data are available. In the absence of the break-up of details of financial

and non-financial transactions of the item (b) as well as of other liabilities

(miscellaneous), other liabilities (miscellaneous) net of other assets (i.e. categories (b)

excluding dead stock account) are shown under financial flows.

Reserve funds & other funds

94. The reserve funds and other funds of the RBI, namely, the National Industrial

Credit (Long-Term Operations) [NIC (LTO)] Fund and National Housing Credit [NHC

(LTO)] Fund, form non-financial items under liabilities of the Bank. The original Reserve

35

Fund of `0.05 billion was created in terms of section 46 of the RBI Act as contribution

from the Central Government for the currency liability of the then sovereign government

taken over by the Reserve Bank. Thereafter, `64.95 billion was credited to this Fund out

of gains on periodic revaluation of gold up to October 1990, taking it to `65 billion. The

accumulation in the Fund has been static since then and appreciation/depreciation on

account of valuation of gold and foreign currency is booked in the Currency and Gold

Revaluation Account (CGRA) which is a part of the head ‗Other Liabilities‘ in RBI‘s

balance sheet. Change in these reserves, namely, reserve fund, NIC (LTO) Fund, NHC

(LTO) Fund, CR, and ADR is taken as the saving of the Bank.

Financial Assets

Monetary gold and SDRs

Monetary gold (Gold coins & Bullion)

95. Stocks of gold held by the Bank in the vault are shown against this head. The

gold purchased by the Bank, as a part of its transactions, from the International

Monetary Fund (IMF) is also included here.

96. The increase in the value of gold holdings due to revaluation is not shown under

the financial flow account. This particular amount due to revaluation is shown against

revaluation account under ‗Other Liabilities‘ and, therefore, only the increase in the

value of gold due to rise in physical stock of gold is shown under financial flow

accounts. It is considered as a foreign asset and shown against the ‗Rest of the World‘

sector for the sectoral classification.


Currency (Rupee coins, small coins and Bank notes)

97. This item comprises the holdings of the Issue and the Banking Departments of

the Bank in the form of one rupee notes/coins and small coins and also any other coins

issued by the Government of India. Rupee coins and small coins are shown as the

Bank‘s claim on the Government Sector, because one rupee coins/notes and small

coins are shown as the currency liability of the government.

98. Bank notes held in the Banking Department of the Bank relate to the notes

issued by the Bank and as such form the transactions within the Bank.

Deposits

36

99. Cash balances and fixed deposits with foreign central banks and other major

international commercial banks (which form part of the foreign currency assets) are

included under this head.

Debt securities

100. The Statement of Affairs of the Bank presents data on investments under

different heads of assets viz. Government of India (GoI) rupee securities (including

treasury bills), foreign securities, Shares in BIS/SWIFT, holdings in

Subsidiaries/Associate Institutions (DICGC, NABARD, NHB, BRBNMPL). While the first

item is shown under this category, the second item is clubbed with ‗foreign assets‘ as

explained below. The last two items are shown under the instrument ‗equity and

investment fund shares‘.

101. The details of investments are obtained from DGBA. The securities of the GoI,

treasury bills and rupee securities are shown separately in the FoF accounts. The

Bank‘s investments in government treasury bills include rupee treasury bills and bills

purchased and discounted, while rupee securities form the Bank‘s investments in

government rupee securities.

Foreign assets

102. Foreign currency assets (FCA) of the RBI include deposits with other central

banks, the Bank for International Settlements (BIS), foreign commercial banks and

investments in foreign treasury bills and securities. As these relate to transactions of the

Bank with foreign governments/central banks and international institutions, these are

classified against the ‗Rest of the World‘ sector. While investment in foreign securities is

shown under debt securities, cash balances and fixed deposits with foreign central

banks and other major international commercial banks are shown under ‗deposits‘.

Loans (Loans and Advances)

103. The Reserve Bank extends loans and advances to central and state

governments, NABARD, scheduled commercial and cooperative banks, EXIM Bank and

primary dealers.

104. In addition, certain items such as staff advances, which are shown under ‗other

assets‘ [Miscellaneous assets] are included under this head. The particulars of these

assets are obtained from DGBA as well as through a special return from the regional

offices of the Bank, a reference to which was made while discussing ‗other liabilities‘.

Loans and advances to staff are shown as loans to Households.

37


Equity

105. The shares of BRBNMPL, DICGC, NABARD and NHB are shown under this

instrument.

Other accounts receivable/payable (Other Assets)

106. ‗Other Assets‘ of Banking Department comprise fixed assets (net of

depreciation), gold held abroad (265.49 metric tonnes)9, accrued income (mainly

comprising interest income accrued on balance sheet date on the Bank‘s domestic and

foreign investments), and miscellaneous assets. Miscellaneous assets comprise mainly

loans and advances to staff, amount spent on projects pending completion, the margin

offered for reverse repo transactions, security deposit paid, and items in transit

representing inter-office transactions (RBI General Account).

107. As explained earlier under ‗other liabilities‘, the details of financial and non-

financial items included in ‗other assets‘ are received from the regional offices of the

Bank. Besides the exclusion of certain financial items from other assets, the amount

under dead stock account, which relates to the fixtures, furniture and premises of the

Bank, is also excluded from it before netting with ‗other liabilities‘. Increase in dead

stock account represents the net capital formation of the Bank.

Deposit-taking Corporations, except the Central Bank

Commercial Banks

108. This sub-sector comprises

i) State Bank of India (SBI) and its subsidiaries,

ii) Public Sector Banks (including IDBI Bank),

iii) Private Sector Banks (old and new)

iv) Regional Rural Banks (RRBs),

v) Foreign Banks operating in India.

vi) Other Indian non-scheduled commercial banks [Local Area Banks (LAB)].

109. The financial assets and liabilities data of Scheduled Commercial Banks are

available from three sources: Form X return of SCBs (including RRBs) as at end-March,

Statistical Tables Relating to Banks in India (STB) based on the audited accounts of the

9 This is included under ‗Gold coin and bullion‘.

38

SCBs (excluding RRBs) as at end-March, and Section 42 returns (as on last reporting

Friday/last Friday of March).

110. For the compilation of the FOF accounts of SCBs (including RRBs), the Form X

returns are primarily used and supplemented with the STB and Section 42 returns. For

the RRBs, the consolidated data provided by FIDD is used as supplements.

111. As sectoral details for most of the instruments are not available from these three

sources, these details are estimated by making use of the results of different surveys on

bank credit, deposits and investments (viz., Basic Statistical Returns (BSR) 1, 4 and 5).

The procedure of compilation of the accounts for the sub-sectors is detailed below:

Liabilities


Deposits

112. Data on deposits with SCBs (including RRBs) are obtained from the Form X

returns. The total deposits are disaggregated into current, saving and fixed deposits.

Further, current and fixed deposits are disaggregated into deposits from Banks and

‗Others‘. The sectoral ownership of these deposits is estimated on the basis of the

respective shares in the ‗Composition and Ownership of deposits with scheduled

commercial banks (including RRBs) as on end-March‘; available through the BSR-4

Census10 and published in the STB.

Debt Securities

113. Banks are allowed to raise funds through subordinated debt. This data is

obtained from the STB.

Loans

Borrowings and calls received in advance

114. The data relating to banks‘ borrowings furnished in the Form X are classified as

borrowings from

a. Banks in India

i. RBI

ii. SBI

iii. Associates of SBI

iv. Other Commercial Banks

10

The BSR-4, which was survey-based earlier, is a Census since 2012.

39

v. Co-operative Banks

b. From banks outside India

c. From financial institutions in India

i. IDBI

ii. NABARD

iii. EXIM Bank

iv. Others

d. From financial institutions outside India

Equity and Investment Fund Shares

Paid-up capital

115. Data on the paid-up capital are obtained from Form X returns which are available

for five groups of banks, viz., (a) SBI and its subsidiaries, (b) Public Sector banks, (c)

Private Sector Banks, (d) RRBs, and (e) foreign banks. The paid-up capital of

commercial banks is allocated among (a) the central government, (b) banks, (c)

financial institutions, and (d) household sector.

116. The shareholding pattern of State Bank Group, Nationalised Banks, Old and New

Private Sector Banks that is provided in the Statistical Tables relating to Banks in India

is used for allocating the equity holding of these Banks. Paid–up capital of the RRBs is

held by the central government, state governments and commercial banks, in the ratio

50:15:35 and allocated accordingly.

Other accounts payable

Bills payable

117. Details of this item are given under bills payable in India and bills payable outside

India. The latter part is shown against the ROW sector.

Branch adjustments

118. Data under this head are available for branch adjustments (a) with offices in

India, and (b) with offices outside India. While the second category represents

transactions with the ROW sector, the first category represents intra-commercial bank

transactions. An item ‗branch adjustments among offices in India‘ also appears under

‗assets‘ side. This item which appears under assets and liabilities sides represents the

same type of transaction. Normally these should match with each other, as the liability

of one branch on this account would be the corresponding asset of the other and vice

40

versa. However, in practice these two do not match with each other. Therefore, the

higher amount of ‗branch adjustments among offices in India‘ either under assets or

liabilities, is retained and the smaller amount is revised upwards by adjusting the ‗other

assets‘ or ‗other liabilities‘, as the case may be.

Miscellaneous liabilities

119. Data on this item are available in the Form- X return. It comprises various items

of financial and non-financial nature, such as unclaimed dividends, staff gratuity

account, investment fluctuation reserves, provision for tax liability, reserve for bad and

doubtful debts, special reserves, secret reserves and interest accrued on deposits

outstanding. However, details on these components are not available for bifurcating

them into financial and non-financial transactions. The item ‗other intangible (though

termed as tangible) assets‘ includes interest accrued on investments, advance tax paid

less provision and tax deducted at source, sundries, like suspense, temporary advance,

security deposits, clearing and other adjusting accounts. This item also includes both

financial and non-financial items, for which no details are available. The item

‗miscellaneous liabilities‘ net of other assets‘ (after adjusting for the reporting difference

are presented as financial flow.

Reserve Fund, Other Reserves and Balance of Profit

120. Changes in these items represent net saving of the commercial banks during the

fiscal year. The balance of amount against share premium account though received

from the investors for which no liability arises for the banks is also shown along with

savings. The amount of forfeited shares which also should be shown under this

category is shown along with paid-up capital for want of details.

Financial Assets


Currency (Cash on hand)

121. Data on cash in hand are taken from the Form X return. This item is split into

bank notes and government notes, as described in the accounts of the RBI. Bank notes

are classified against the banking sector while the government notes are shown under

the government sector.

Deposits

Inter-bank positions (Balances with RBI and banks, money at call and short notice)

41

122. Data on these items are obtained from the Form X return under the sub-heads

(a) balances with the RBI, (b) balance with other banks - in current account, and (c)

money at call and short notice. Balances with other banks in India (current account)

include that with SBI and associates, other commercial banks and co-operative banks.

The item ―Fixed deposits with Banks (including co-operative banks)‖ shown under

Investments in the Form X returns is also included under this head.

123. Money at call and short notice represents the amount made available to others

by way of loans or deposits repayable at call or short notice of a fortnight or less.

Commercial banks and other financial institutions participate in the call money market.

Based on the details available in Form X, the money at call is allocated between

commercial banks and other financial intermediaries.

Debt securities and Equity

Investments

124. This item in Form X records banks‘ investments in (a) Treasury Bills, (b) Other

Central Government Securities, (c) State Government Securities, (d) other approved

securities (e) shares and debentures of companies and corporations not included in (d),

(f) fixed deposits in banks (including co-operative banks) and (g) other investment in

India. The Form X returns shows ‗fixed deposits with banks‘ under ‗investments‘.

However, fixed deposits are not considered while working out the sectoral details of

investments. The survey of investments of scheduled commercial banks as on 31st

March (BSR-5) published by RBI (BSR, Table 8.1), classifies the total investments of

banks into investments by offices in India and investment by foreign offices of Indian

banks. The latter are not taken into account in working out the sectoral estimates. This

survey is, however, available with a one year lag.

Loans

Loans and Advances

125. Total bank credit consists of ‗loans, cash-credits and overdrafts‘, ‗inland bills

purchased and discounted‘ and ‗foreign bills purchased and discounted‘. Loans, cash-

credits and overdrafts represent all types of credit facilities (other than the bills) such as

demand loans, term loans, cash credits, overdrafts and packing credits. Inland bills

represent bills drawn and payable in India including demand drafts and cheques,

purchased and discounted and foreign bills include all import and export bills including

demand drafts drawn in foreign currencies and payable in India. Data on total bank

credit, collected from the Form X return/ Statistical Tables, are available separately in

respect of advances to banks and to others.

42

126. The information on bank credit according to organisation and occupation

(industrial activity), as on 31st March every year, are available in the BSR-1 publication

of RBI. 11 The occupational groups classified for the purposes are: (i) agriculture, (ii)

Industry, (iii) transport operations, (iv) professional and other services, (v) personal

loans, (vi) Trade, (vii) finance and (viii) others. Under these occupational groups, the

Household Sector covers pure households (individuals, HUF, etc) and organizations like

proprietary concerns, partnership, joint families, joint liability groups (JLG), NGOs,

Trusts etc. Besides, the amount shown under credit limits of `25,000 and less is also

shown as loans to the household sector.

127. Advances to commercial banks and intra-commercial bank balances (including

fixed deposits) appearing under assets have corresponding entries under liabilities as

borrowings from commercial banks in India and intra-commercial bank deposits. Due to

differences in reporting, figures appearing against these heads under assets and

liabilities do not match with each other. Therefore, to minimise the discrepancy arising

due to differences in reporting the higher amount is maintained either under assets or

liabilities by revising upwards the lower amount by adjusting other assets or other

liabilities as the case may be.

128. Details of branch adjustments among offices in India and branch adjustments

with offices outside India are available in Form X. The former category is an intra-bank

transaction while the latter is taken as a claim on the Rest of the World. As stated

earlier, branch adjustments among offices in India appearing under assets should

match with the similar item on liabilities side. As it does not match in practice, the higher

figure is maintained under assets and liabilities by revising upwards the lower figure.


Other intangible assets

129. While describing the item ‗other miscellaneous liabilities‘ mention is made about

the type of financial transactions included under ‗other intangible assets‘. The excess of

other assets over miscellaneous liabilities, after excluding the amount transferred to

inter-commercial bank transactions (viz., deposits, borrowings, branch adjustments), is

shown as a financial transaction. 11 BSR-1 relates to gross bank credit and comprises term loans, cash credit, overdrafts, bills purchased and discounted, bills rediscounted under the Bill Market Scheme and also dues from banks, whereas, the bank credit data, based on returns under Section 42(2) of the RBI Act, 1934, is exclusive of dues from banks and bills rediscounted. The BSR-1 return is divided into two parts - Part A and Part B (termed as BSR-1A and BSR-1B). Till 1998, the BSR-1A return covered accounts with individual credit limit of over ` ₹25,000. Consequent upon the revision in the cut-off credit limit from March 1999 survey, BSR-1A return for scheduled commercial banks other than Regional Rural Banks, covers accounts with individual credit limit of over ₹ 0.2 million. In the case of Regional Rural Banks, the cut off limit then was ` ₹25,000. The revision of cut off limit for classifying accounts in BSR-1A has been made as ₹ 0.2 million for Regional Rural Banks also from March 2002 onwards. In BSR-1A, information in respect of each of the borrowal accounts is collected on various characteristics, such as place (district and population group) of utilisation of credit, type of account, type of organisation, occupational category, category of borrower code, secured/unsecured loan code, fixed / floating rate of interest flag, rate of interest, credit limit and amount outstanding. In BSR-1B, information in respect of small borrowal accounts with individual credit limit up to ` 0.2 million is obtained from all scheduled commercial banks in consolidated form for broad occupational categories for two separate credit limit groups, i.e., ‘up to ` ₹25,000’ and ‘over ₹25,000 and up to ₹ 0.2 million’.

43


Premises, furniture, fixtures and other fixed assets

130. Data on this item are taken from the Form X return/STB. The item represents net

physical assets of commercial banks and the variation over the two consecutive periods

is the net capital formation of commercial banks.

Capitalised expenses and non-banking assets acquired in satisfaction of claims

131. This item, obtained from the Form X return, is classified as a non-financial

transaction. Capitalised expenses include preliminary expenses, organisational

expenses, share selling commission, brokerage, loss incurred and any other

expenditure. This is, therefore, shown as other capital payment.

Excess of liabilities over assets

132. The Form X return presents the liabilities and assets of all commercial banks in

respect of their Indian business only. Therefore, the totals of liabilities and assets given

in the Form X return do not match with each other. The difference, i.e., the excess of

liabilities over assets is shown as net foreign assets and considered as a claim on the

rest of the world.

Co-operative Banks

133. This sub-sector includes the deposit-taking, State Co-operative Banks (StCBs)

District Central Co-operative Banks (DCCBs), Primary/Urban Co-operative banks

(PCBs/UCBs).

134. The data on assets and liabilities as at end-March for StCBs and DCCBs are

available in Form IX returns from the FIDD, RBI. The compilation methodology is given

in detail below. The ‗Statistical Statements on the Co-operative Movement in India‘

published by the NABARD, which provides the sectoral details of various financial

instruments, is available with a time lag. Therefore, the Statistical Statements is

primarily used for obtaining the ownership pattern wherever they are not available from

the data provided by FIDD in respect of StCBs and DCCBs and DCBR in respect of

UCBs.

State and Central Co-operative Banks


Deposits

135. Deposit data by type of deposits, i.e. current, savings, fixed and other deposits

(cash certificates, recurring deposits, etc) are available for StCBs and DCCBs. For each

44

of these deposit types, ownership by (a) DCCB, (b) Non-financial corporations, (c) Other

Societies, (d) Individuals, firms and companies, and (e) Reserve fund deposits

maintained by societies are available separately. The ownership of other categories is

obtained by applying ratios from the Statistical Statements of the latest available year.

Loans (Borrowings)

136. The break-up of borrowings into borrowings from (a) RBI (b) SBI (c) StCB, (d)

DCCB, (e) NABARD and (f) Others is available. Borrowings from other sectors is

obtained using shares in the Statistical Statements of the latest available year.

Equity and Investment Fund shares


137. The Form IX returns of the FIDD provides the paid-up capital of StCB and

DCCBs as held by (a) Individuals, (b) Cooperative Societies, (c) State Government and

(d) Others. Ownership of other sectors is obtained by applying shares as per the latest

available Statistical Statements. The Statistical Statements provide the details of paid-

up capital held by co-operative credit and non-credit societies.

Other accounts receivable/payable (Other Demand and Time liabilities)

138. The data on ‗other demand‘ and ‗other time liabilities‘ are shown under this head.

Reserve funds and other reserves

139. The Form IX returns of FIDD provide data on (a) Statutory reserves, (b)

Agricultural Credit Stabilisation Fund, (c) Dividend equalization Fund, (d) Special Bad

debt reserve, (e) Bad and doubtful debts reserves, (f) investment depreciation reserves

and (f) Other Funds and Reserves. The change in these reserves is shown as the

saving of the StCBs/DCCBs.

Financial Assets


Currency (Cash in hand)

140. Data on this item are readily available. This item is split into (a) RBI notes, and

(b) one rupee notes and coins as per the usual procedure.12

Deposits

12

For details please see RBI Sub-sector

45

Balances with banks

141. This item includes total amount of balance with banks. The Form IX returns

provides the segregation of these balances with (i) RBI, (ii) SBI and its subsidiaries (iii)

banking companies, and (iv) Co-operative banks viz., State Co-operative bank of the

State concerned and Central Co-operative bank of the District concerned and (v) other

Co-operative banks. This item, which includes fixed deposits with commercial banks

and co-operative banks is shown separately in FOF accounts.

Call deposits (Money at call & Short Notice)

142. Call deposits are the amounts kept with banking institutions as deposits which

can be withdrawn at call or short-notice, irrespective of the period of notice. The Form

IX returns give the details of the Money at call and short notice with (a) SBI and its

associates, (b) Banking Companies, (c) StCB of the State concerned, (d) DCCB of the

district concerned and (e) Other Co-operative Banks.

Debt securities

143. The Form IX return, under the head ‗Investments‘ provides the details of

investment in debt securities, namely (a) Central Government Securities (including

treasury bills), (b) State Government securities, (c) Debenture of SCARDBs (earlier

known as Land Mortgage Banks) and (d) other Trustee securities.

Loans

144. The Form IX provides data on loans and advances made for (a) agricultural

operations (short term and medium term), (b) Marketing of Crops, (c) Weaver Societies,

(d) Other industrial purposes (short term and medium term), and (e) Other purposes.

The recipients of loans and advances are classified against (i) co-operative societies, (ii)

individuals and others. Loans to the first category are split into (a) co-operative banks

and credit societies, and (b) cooperative non-credit societies, on the basis of data

obtained from the special returns. The second category of borrowers covers all

individuals as well as other institutions. In the absence of further details, the category

‗individuals and others‘ is classified as ‗households‘.


145. The Form IX return provides data on investments out of the Principal/Subsidiary

Partnership Funds in the shares of (i) StCBs, (ii) DCCBs, and (ii) other co-operative

societies.

Other accounts receivable / payable

146. This item includes ‗bills purchased and discounted‘, ‗interest receivable on loans

and advances‘, interest overdues and ‗other assets‘. ―Overdue interest‖ relates to the

46

amount of interest that was due on loans and advances during the year but not received

and it does not relate to interest accrued on investments. The total amount of interest

due is allocated to ‗societies‘ and to ‗households‘ in the proportion of loans outstanding

against these two categories of borrowers.


Fixed assets

147. Fixed assets (shown as premises, furniture, fixtures and other fixed asstes)

represent the capital stock as at the end of the year and the variation in it, is the net

capital formation of these banks during the year. As such, variation in fixed assets is

taken to represent net fixed assets formation.

Difference between assets and liabilities

148. The figure appears under liabilities or assets depending on whether the assets

are more or less than liabilities. This item is clubbed together with reserve fund and

other reserves/funds, as a non-financial transaction.

Urban Cooperative Banks (UCBs)

149. The data on assets and liabilities as at end-March for UCBs are collected from

DCBR. The sectoral details, wherever not available, are worked out by applying shares

as per the data for StCBs and DCCBs.

Deposit-Taking Non-Banking Financial Companies (NBFC-D)

150. This sub-sector includes all deposit taking NBFCs registered with the DNBR in

the RBI. The consolidated data on assets and liabilities of these NBFCs are provided by

the DNBR. The compilation of the sectoral FOF accounts are as follows:

Deposits

151. Currently, the entire deposits held by the NBFC-D are classified as held by

households.

Debt securities

152. The debentures issued by the NBFC-D are segregated as subscribed by (a)

Mutual Funds, (b) Banks, (c) NBFCs, and (d) Others.

Loans (Borrowings)

153. The data on borrowings by NBFC-D from (a) Banks, (b) Financial Institutions and

(c) Government are available. Further, data on subordinated debt and ‗other borrowings‘

are available, for which the sectoral details are not available.

47


154. The DNBR data provides cash on hand and deposits of the NBFC-D with banks.

Debt securities

155. The investments of NBFCs in (a) Government securities, (b) Commercial Paper

and (c) Debenture and Bonds are available and included under this head.

Loans and advances

156. The data on loans and advances are available, though the sectoral details are

not available.

Equity and Investment fund shares

157. Data on investment in (a) equity shares, (b) preference shares, and (c) units of

mutual funds are available, though the sectoral details are not available. The item ‗other

investments‘, in the absence of details, are included under this head.

Other accounts receivable / payable

158. The items ‗Other Current Assets‘ and ‗Other Assets‘ are included under this

head.

Deposit-Taking Housing Finance Companies (HFC-D)

159. This sub-sector includes all deposit taking HFCs registered with the National

Housing Bank (NHB). The NHB provides the consolidated data on all financial assets

and liabilities and the sectoral details to RBI, which are used for compilation of FoF

accounts for their sector.

1.2.3 Mutual Funds 160. This sub-sector includes the Mutual Funds registered with the SEBI. The SEBI

provides the consolidated data on all financial assets and liabilities and the sectoral

details to RBI for the compilation of the FOF accounts for this sub-sector.

1.2.4 Other financial intermediaries, except insurance corporations and

pension funds

Primary Credit Societies

161. ‗Primary credit societies‘ comprise primary agricultural and non-agricultural credit

societies. Certain primary non-agricultural credit societies, such as, urban banks,

employees‘ credit societies, which satisfy certain provisions of the Banking Regulation

Act, 1949 and Section 2(c) (iv) of the RBI Act, are classified as primary co-operative

banks. The compilation of the FOF accounts of the PCBs/UCBs was explained above.

Grain banks are also a type of primary agricultural credit societies.

48

162. The Statistical Statements on the Cooperative Movement in India is published

with a lag. Therefore, the FOF accounts for these societies for the years under review

are estimated by applying the same growth as observed under the relevant financial

instruments of the DCCBs as per the Form IX return of the FIDD, RBI. These estimates

undergo revision as and when the Statistical Statements of the particular year are

released by NABARD.

State Cooperative Agriculture and Rural Development Banks (SCARDBs)

and Primary Cooperative Agriculture and Rural Development Banks

(PCARDBs)

163. For the FOF accounts of the SCARDBs and PCARDBs, the data provided by

NABARD is used. For SCARDBs, the sectoral details are obtained by applying the

shares as observed in the StCB data furnished by FIDD. For PCARDBs, the sectoral

details are obtained by applying the shares as observed in the DCCB data furnished by

FIDD.

Industrial Co-operative Banks (State/Central)

164. The Statistical Statements on the Cooperative Movement in India, which is the

primary source for these cooperatives, is published with a lag13. Therefore, the FOF

accounts for these societies for the years under review are estimated by applying the

same growth as observed under the relevant financial instruments of the DCCBs as per

the Form IX return of the FIDD, RBI. These estimates undergo revisions as and when

the Statistical Statements of the particular year are released by NABARD.

Financial Corporation and Companies

165. The coverage of the sub-sector ‗financial corporations and companies has

improved over time on account of the availability of data. The sub-sector includes

NABARD, EXIM Bank, SIDBI, REC, HUDCO, SFCs, and SIDCs. The Annual Report

and Accounts of the corporations form the basic source in respect of most of the

financial corporations. The data pertaining to NABARD, EXIM Bank, SIDBI, REC, and

HUDCO are also obtained through special returns from these institutions. The

consolidated data for the SFCs are provided by the SIDBI.

166. Earlier, the studies on finances of ‗financial and investment companies‘ published

in the RBI Bulletin formed the basic source for the financial companies. Since the

studies present the data only for a sample of non-government financial companies, the

global figures were estimated on the basis of the share of the paid-up capital covered in

these studies. In the revised methodology, however, with the DNBR providing

consolidated balance sheet information of both deposit-taking (NBFC-D) and non-

13

The latest available is for the year _________.

49

deposit taking systemically important NBFCs (NBFC-NDSI) and the NHB providing

consolidated balance sheet information of HFCs, the studies on finances of ‗financial

and investment companies‘ are used to estimate the financial flows in the rest of the

sector excluding the NBFCs and HFCs.

1.2.6 Insurance corporations 167. This sub-sector includes all the insurance companies/corporations which are

engaged in life insurance business, general insurance business, namely, capital

redemption insurance, marine insurance, fire insurance and miscellaneous insurance,

and deposit insurance business. The life insurance business carried out by post offices

is, however, not included here but is covered in the central government‘s accounts.

168. The annual reports of the companies/ corporations form the basic source for the

data on their assets and liabilities. The Insurance Regulatory and Development

Authority of India (IRDAI) provides consolidated balance sheet data (along with sectoral

details) pertaining to the life and non-life insurance companies which is used in the

compilation of the FOF accounts of this sector.

1.2.7 Pension funds

Provident Funds

169. This sub-sector covers (i) the employees‘ provident fund of the non-government

and certain semi-government organizations whose accounts do not get reflected in the

budgets of central and state governments, (ii) the contributory pension fund, (iii) the

National Pension System (NPS), and (iv) the deposit linked insurance fund maintained

by certain trusts of provident funds.

170. The first category comprises the employees‘ provident fund of the RBI,

commercial banks, coal mines, Assam tea plantations, seamen, industrial

establishments covered under the Employees Provident Fund (EPF) Scheme, 1952,14

local authorities (including port trusts), IFCI, SFCs, LIC, the Air India, non-government

educational institutions, labour boards and ‗financial and investment‘ companies. The

second category covers the contributory pension fund of the employees of coal mines,

Assam tea plantations, and EPF scheme.

171. The third category, the NPS reflects the Government‘s effort to find sustainable

solutions to the problem of providing adequate retirement income. As a first step

towards instituting pensionary reforms, Government of India moved from a defined

benefit pension to a defined contribution based pension system by making it

14

Came into force with effect from 1-11-1952 under the Employees’ Provident Funds and Miscellaneous Act, 1952.

50

mandatory for its new recruits (except armed forces) with effect from 1st January,

2004. Since April 1, 2008, the pension contributions of Central Government employees

covered by the NPS are being invested by professional Pension Fund Managers in line

with investment guidelines of Government applicable to non-Government Provident

Funds.

172. As at end-January 2014, twenty eight (28) States/UT Governments have notified

the NPS for their new employees. Of these, twenty four states have already signed

agreements with the intermediaries of the NPS architecture appointed by PFRDA for

carrying forward the implementation of the NPS. The other States are in the process of

finalisation of documentation. Since May 1, 2009, the NPS has been made available to

every citizen on a voluntary basis. The fourth category, the deposits linked insurance

fund, is maintained by the EPF organization, coal mines and Assam tea plantations.

173. The provident funds of central and state governments‘ employees (known as

State Provident Funds) and the Public Provident Fund (under small savings) are not

included in this sector but covered under the accounts of the central and state

governments.

174. The basic sources providing the data on provident fund/pension fund are the

special returns from EPFO, coal mines and Assam tea plantations, seamen, BSR-5 in

respect of commercial banks, data from the DGBA (RBI), dock labour boards, LIC and

Air India.

175. The contribution of employees and the employers into the Provident Funds, the

contributory pension fund, the National Pension System and the deposit-linked

insurance fund are the sources of funds for this sub-sector. The household sector is

treated as the claimant of these funds.

176. The special returns of the provident funds provide data on investments in (i)

central government securities, (ii) state government securities, (iii) government

guaranteed securities (e.g. bonds of financial corporations, port trusts, and SEBs), (iv)

small savings (i.e. post office savings and time deposits and national savings

certificates), (v) deposits with commercial banks, and (vi) special deposits with central

government. In the case of the RBI, the employees‘ provident fund is maintained as

deposits with the RBI. The investment pattern of provident funds of commercial banks is

directly available in BSR-5.

2.3 General government 177. The Government Sector comprises (a) central government and autonomous

bodies, (b) state governments and union territories, (c) local authorities (covering

municipal corporations, municipalities and panchayats). Financial undertakings of the

public sector are not included here as they are covered under banking and other

51

financial institutions sectors. The post office savings banks are, however, included in

the accounts of the central government as the liabilities of the post offices are borne by

the central government. The procedure adopted for the compilation of the accounts of

each sub-sector is described in the following paragraphs.

2.3.1 Central government including social security

178. The ‗Economic and Functional Classification (EFC) of the Central Government

Budget‘ published by the Department of Economic Affairs, Ministry of Finance,

Government of India, forms the basic source of data to compile the accounts of this sub-

sector. Unlike in the case of financial institutions and, for which the balance sheet data

are available, the Economic Classification presents a set of six accounts reclassifying

data given in the budget of the central government. Accounts 4 and 5 of the Economic

Classification provide data on changes in financial liabilities and assets of the central

government administration.

179. The EFC, however, does not present the sectoral break-down of market loans,

treasury bills, small savings, other types of borrowings, as also the disbursement of

funds through investments, and loans and advances. For arriving at the sectoral break-

down of some of the government‘s sources and uses of funds, the information from

various other sources is used. The sectoral particulars of these various items are given

below.

Liabilities


Deposits (Small savings)

180. Small savings comprise savings deposits with post offices and savings

certificates. These include post office savings bank deposits, time deposits (1, 2, 3 and

5 years), recurring deposits, monthly income scheme deposits and senior citizen saving

scheme, National Savings Certificates (NSC) and Public Provident Fund (PPF). The

money raised through the PPF is shown separately under State Provident Fund.

Regarding the ownership details, these are derived on the basis of investing sector‘

accounts. Thus, the residual after deducting the above sectors‘ investment in small

savings from the total small savings, is assumed to have been invested by the

Household Sector.

Debt securities

Treasury Bills

52

181. Data on treasury bills (14-day to 364-day) (net) are available in the EFC.

Ownership particulars of these bills are available in the return received from the

Department of Government and Bank Accounts (DGBA) of the Bank.

Market Loans

182. The gross receipts of market loans and their repayments are given in the

Economic Classification. The sectoral break-up of the market loans, according to

various sectors is worked out on the basis of data available on ―Ownership of Central

Government securities‘. The categories of ownership given therein are (i) the Reserve

Bank of India (own account), (ii) Scheduled Commercial Banks, (iii) Primary Dealers,

(iv) Insurance Companies, (v) Financial Institutions, (vi) Mutual Funds, (vii) Provident

Funds, and (viii) Others.

External debt

183. The Economic Classification presents gross borrowings of the central

government from the rest of the world and their repayments. It includes the

government‘s borrowings from various international financial organisations/agencies,

foreign governments as also the special credits from oil exporting countries. Gross

borrowings minus repayments are shown as the net borrowings of the central

government from the Rest of World Sector.

State Provident fund

184. The provident fund of the employees of the central government, and the amounts

collected by the government from public under the Public Provident Fund (PPF)

Scheme, 1968, are covered under this head. This is treated as a claim of the Household

Sector.

Other debt

185. Miscellaneous capital (debt) receipts presented in the Economic Classification

along with one rupee notes and coins are covered under this head. One rupee notes

and coins represent the liability of the central government in the form of currency

consisting of (i) one rupee notes / coins in circulation, (ii) small coins in circulation, and

(iii) commemorative coins issued by the government in higher denominations. Data on

one-rupee notes and coins are collected from tables relating to Money Stock Measures

published in the RBI Bulletin. The holding of one-rupee notes and coins by the RBI has

been added to this amount for deriving the total liability of the central government under

this head. The one-rupee notes and coins are split-up into claims of various sectors

using the estimated holdings of rupee coin and small coins as presented in each

sector‘s accounts.

53

Financial Assets


Currency (Cash balances)

186. The Economic Classification presents the total cash balances of the central

government in its Account No. 6 as increase/ decrease in cash balances. This head

includes the cash in treasuries and deposits with the RBI. Further, the total cash in

treasuries is split-up to show bank notes and government notes and coins.

Loans & Advances

187. Particulars of disbursement of loans and advances are given against (i) loans for

capital formation, and (ii) other loans. Institutional details of disbursement of loans for

capital formation and other loans are available against (i) states and union territories, (ii)

local authorities, (iii) non-departmental commercial undertakings – financial concerns

and others, and (iv) others. The break-up of ‗financial concerns and others‘ under loans

for capital formation, however, are not available. The category ‗others‘ includes co–

operative societies, private sector companies, and households. As the details on

repayments are available only against ‗states and union territories‘ and ‗others‘, the

sectoral particulars of loans and advances net of repayments are derived for sectors

other than state governments wherever available, on the basis of (i) accounts of

financial corporations, government and non-government companies, (ii) the budget of

the central government in the case of repayments by foreign governments, (iii) Finance

Accounts of the Union Government, and (iv) the Explanatory Memorandum to the

Budget. Financial corporations and government non-financial undertakings show, in

their accounts, their borrowings from the central government which are taken as its

loans to them. Data on loans to households comprising loans to government servants

are compiled on the basis of the details given in the Receipts Budgets of Central

Government Budget. Later, these data are revised in the light of the Finance Accounts

or the Combined Finance and Revenue Accounts which are available subsequently.

Equity and Investment Fund shares (Investments)

188. Account No. 4 of the Economic Classification presents the data on changes in

financial assets of the central government. This account provides the details of

investments into shares of government and other concerns. The government concerns

are further sub- divided into financial concerns and other concerns. Financial concerns

consist of banking institutions, financial corporations and insurance corporations in the

public sector, while others relate to the non-financial non-departmental undertakings.

54

Other accounts receivable

189. Data on subscriptions to international financial organizations are given in the

Economic and Functional Classification. This item is shown as a claim on the ‗Rest of

the World‘ Sector.

2.3.2 State government and Union Territories including social security 190. The Combined Finance and Revenue Accounts (CFRA) of union and state

governments in India published by the Comptroller and Auditor General of India,

Government of India, gives data in respect of all state governments but this publication

is available after a lag. The primary source to prepare the CFRA is Finance Accounts of

state governments published by the Auditor General of each state which is also

available with a lag of about two years. The studies on ‗Finances of State Governments‘

prepared by the Department of Economic and Policy Research (Fiscal Analysis

Division) provide the data relating to state governments and two union territories with

legislature.

191. Data presented in the RBI Studies, however, do not provide all the necessary

details for compiling the FoF accounts of this sub-sector. These are supplemented with

the data from budget documents and other sources, like information on ‗Ownership of

State Government Securities‘, ‗Finance accounts of State Governments‘ and the

accounts of other sectors.

192. Budgets of the state governments are used to obtain the particulars of their debt

under the following heads: (i) internal debt comprising market loans, power bonds,

special securities issued to NSSF, loans from banks/financial institutions, ways and

means advances from RBI and others including land compensation and other bonds; (ii)

loans from the Centre and (iii) public account including State PF, reserve fund and

deposits and advances; and (iv) Contingency Fund.

Liabilities

Debt Securities (Market Loans)

193. Market loans include state development bonds floated in the market by the state

governments. The Budget documents or the ‗Finance Accounts‘ of each state

government present only gross receipts and repayments of market loans. The

particulars of ownership are derived from the information on ‗Ownership of State

Government Securities‘ published in the ‗Handbook of Statistics of the Indian Economy.

Loans (Borrowings)

194. Borrowing by way of (i) ways and means advances from the RBI, and (ii) special

securities issued to NSSF (iii) loans and advances from banks/ financial institutions and

(iv) loans and advances from the central government are covered under this sub-head

55

Provident funds

195. This instrument known as unfunded debt, includes provident funds of state

government employees (titled as State Provident Funds), State insurance and pension

funds and others. State provident funds are treated as claims of the Household sector

and shown separately.

Financial Assets


Currency (Cash Balances)

196. Data on cash at treasuries, local remittances, balances at the RBI and other

commercial banks are obtained from either the Combined Finance and Revenue

Accounts or the Finance Accounts of each state government. Amounts shown against

(i) cash with departmental offices, and (ii) permanent cash imprest are also included

under cash balances forming currency held by the state governments‘ administration.

Loans and Advances

197. The study on ‗Finances of State Governments‘ provides the details on total loans

and advances of all the state governments but these are not sufficient for the purpose of

FOF accounts. Therefore, complete details of disbursements and receipts of loans and

advances are culled out from the Finance Accounts of each state government. The

particulars of loans are reclassified according to the following sub-sectors: (i)

Cooperative Banks/Societies, (ii) Local Authorities, viz., Panchayat Raj Institutions,

Municipal Councils/Corporations, (iii) Statutory Corporations, (iv) Government

Companies/Corporations including State Power Utilities, (v) Urban Development

authorities, (vi) Housing Boards, (vii) Households, and (viii) others.

Investments (Debt and Equity)

198. The investments of state governments in share capital and debentures and

securities of central government are covered under this head. However, investments

from (i) cash balance investment account, (ii) sinking fund investment account, (iii) other

accounts, of the state governments in central government securities/T bills would form

intra-government investments. As in the case of loans and advances, the sectoral

particulars are culled out from the Finance Accounts of each state government against

the following sub-sectors; (i) Statutory Corporations, (ii) Rural Banks, (iii) Government

Companies, (iv) Joint Stock Companies and partnership firms, (v) Cooperative Banks

and Societies, and (vi) Industrial Financial Institutions. Besides these, data relating to

investment in securities out of earmarked funds and investment in treasury bills are

obtained from the Finance Accounts of the State Governments.

56

2.3.3 Local government including social security 199. This sub-sector includes municipal corporations, municipalities, and panchayats.

The FOF accounts of this sector would be derived, to the extent possible, from those of

the four domestic sectors described earlier. The FOF accounts would be extended as

and when new data become available.

2.4 Rest of the World 200. The domestic sectors, viz., non-financial corporations, financial corporations,

general government, and households have transactions with foreign governments,

foreign central banks, major foreign commercial banks, various international agencies

and institutions like IMF, IBRD, IDA, ADB, IFC, and non-resident individuals. All

transactions of the domestic sectors with foreign units that are effected through the

medium of money and credit are recorded in the accounts of the Rest of the World

(ROW). The FOF accounts of the ROW are derived from the Balance of Payments

(BOP) statistics.

201. The RBI publishes India‘s BOP statistics which is a statistical statement that

comprises transactions between residents and non-residents during a period. It consists

of the ‗goods and services‘ accounts, the primary income account, the secondary

income account, the capital account and the financial account. The financial account of

the BoP records the transactions of the domestic sectors with foreign entities, leading to

changes in the country‘s foreign assets and liabilities. In other words, the sum total of

net transactions under the current and capital account represents net lending (surplus)

or net borrowing (deficit) by the economy from the Rest of the World, which is reflected

in the financial account as net outflows or inflows of capital.

202. The BoP account is presented from India‘s point of view and the transactions are

recorded as credits or debits, the former constituting increase in liabilities/decrease in

assets and the latter covering decrease in liabilities/increase in assets. As per the

BPM6, capital account transactions are to be recorded on a gross basis, while financial

account transactions (which also include reserve accounts) are to be recorded on a net

basis. The FOF accounts, however, are constructed from the stand point of the ROW

Sector. As such, the credits and debits recorded in the balance of payments statistics

become debits and credits, respectively, for the ROW. The major components of

financial accounts include direct investment, portfolio investment, financial derivatives

(other than reserves), and employee stock options (ESOPs), other investments, reserve

assets (monetary gold), equity and investment fund shares, debt instrument and other

financial assets and liabilities. The details of items appearing in the financial account are

given in the BoP Manual for India, 2010

(http://www.rbi.org.in/scripts/PublicationsView.aspx?id=13013).

http://www.rbi.org.in/scripts/PublicationsView.aspx?id=13013

57

2.5 Household and Non-profit Institutions serving Household Sectors 203. The Household Sector is the residual sector which comprises all individuals,

non-government non-corporate enterprises of farm business and non-farm business,

like, sole proprietorships and partnerships, and non-profit institutions. Thus, it includes

all the enterprises/economic units which are not covered in the other four domestic

sectors of the economy. This sector does not have any single source of data on their

assets and liabilities as on any particular date. The FOF accounts of this sector are,

therefore, derived from those of the four domestic sectors described earlier.

204. The Household sector‘s share in a particular instrument is estimated against

each of the instruments issued or held by each of the sub-sectors. For example,

households‗ deposits with commercial banks are estimated on the basis of the survey of

‗ownership of deposits with commercial banks‘; likewise, households‘ borrowing from

commercial banks is estimated by utilising the data collected through BSR -1 return.

For certain instruments, households‘ share is derived as a residual, viz., investments

of other institutions/sectors in shares are deducted from the total amount issued to

estimate the household sector‘s investment in shares during a year. The procedure of

estimation of the household Sector‘s share in each of the instruments is explained in the

methodology of the respective sub-sectors described earlier, e.g. estimation of

households‘ contributions towards (a) deposits with non-banking financial companies is

given under the sub-sector ‗financial corporations‘, (b) Mutual fund units is presented in

the Mutual Funds sub-sector which is compiled using SEBI data.

References

Commission of the European Communities, International Monetary Fund, Organization for Economic Cooperation and Development, United Nations, and World Bank, 1993, System of National Accounts 1993 (Brussels/Luxembourg, New York, Paris, and Washington). Available via the Internet: http://unstats.un.org/unsd/sna1993/toctop.asp.

———, 2004, Updates and Amendments to the System of National Accounts 1993 (Washington). ———, 2008, System of National Accounts 2008 International Monetary Fund (2000), Monetary and Financial Statistics Manual, October. --- (2008) Monetary and Financial Statistics Compilation Guide, April Reserve Bank of India, Annual Report, various issues. ---, Basic Statistical Returns of Scheduled Commercial Banks in India, various issues. ---, Database on Indian Economy, real time Handbook of Statistics on Indian Economy. ---, (1967), Financial Flows in the Indian Economy - 1951-52 to 1962-63, RBI Bulletin, March. ---, Report on Trend and Progress of Banking in India, various issues. ---, State Finances: A Study of Budgets, various issues ---, Statistical Tables relating to Banks in India

http://www.rbi.org.in/scripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on%20Indian%20Economy

http://www.rbi.org.in/scripts/AnnualPublications.aspx?head=State%20Finances%20:%20A%20Study%20of%20Budgets

58

List of Formats

Format 1: List of Financial Instruments adopted in the Flow of Funds

Accounts

(Rs Crore)

Code Financial Asset Sources/Uses of Funds

Amount outstanding end-March

2011 2012

F Total

F1 Monetary gold and SDRs

F11 Monetary gold

F12 SDRs

F2 Currency and deposits

F21 Currency

F22 Transferable deposits with

Commercial Banks

Cooperative Banks

F29 Other deposits with

Commercial Banks

Cooperative Banks

NBFCs-D

HFCs-D

F3 Debt securities

Short-term securities of



Deposit-taking corporations

Insurance corporations

Pension funds

General Government

Long-term securities of



General Government

Central Government

State Governments

59

Local authorities

F4 Loans

Short-term



General Government

Long-term



General Government

F5

F51 Equity

Listed Shares



Unlisted Shares



Other Equity

F52 Investment fund shares/units

Money market fund shares/units

Other investment fund shares/units

F6

Non-Life insurance technical reserves

Life insurance and annuity entitlements

Pension entitlements/Provident Funds

F8 Other accounts receivable/payable

F81 Trade credit and advances



General Government

Households and NPISHs

Documents

Manual on the Compilation of Flow of Funds Accounts of the