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Date : 24 Aug 2015
Manual on the Compilation of Flow of Funds Accounts of the Indian Economy
Contents
A. Introduction
1. Overview
2. Institutional arrangements
4. Institutional Units
5. Institutional Sectors
6. Financial Assets and Liabilities (Instruments)
7. Sources of data
8. Balancing the accounts
a) Consistency between financial and non financial accounts
b) Stock/flow consistency
c) Consistency checks/Control Totals
B. Compilation Guide
1. Total Economy
1.1 Non-Financial Corporations
1.1.1. Non-Government non-financial companies
Liabilities
Deposits
Debt Securities
Loans (Borrowings)
Equity (Paid-up capital)
Trade payables and other current liabilities
Reserves and Surplus
Provisions
Financial Assets
Currency and deposit
Investments (Debt and equity securities)
Loans and advances
Other non current assets
Non-Financial Assets
Net fixed assets
Inventories
2.2.2 Power Sector Companies and State Electricity Boards
Financial Liabilities
Deposits
Debt securities (bonds and debentures)
Loans (Borrowings)
Other accounts payable
Financial Assets
2.2.3 Co-operative non-credit societies
2.2.4 Port Trusts
Liabilities
Assets
2.2.5 Government Non-departmental non-financial undertakings
(i) Central and State Government Companies
Liabilities
Financial Assets
1.2 Financial Corporations
1.2.1 Central Bank – the Reserve Bank of India
Liabilities
Currency and deposits
Equity and investment fund shares
Other accounts receivable/payable
Reserve funds & other funds
Financial Assets
Monetary gold and SDRs
Deposit-taking Corporations, except the Central Bank
Commercial Banks
Liabilities
Equity and Investment Fund Shares
Financial Assets
Co-operative Banks
State and Central Co-operative Banks
Financial Assets
Urban Cooperative Banks (UCBs)
Deposit-Taking Non-Banking Financial Companies (NBFC-D)
Deposits
Debt securities
Loans (Borrowings)
Currency and deposits
Debt securities
Loans and advances
Equity and Investment fund shares
Other accounts receivable / payable
Deposit-Taking Housing Finance Companies (HFC-D)
1.2.3 Mutual Funds
1.2.4 Other financial intermediaries, except insurance corporations and pension funds
Primary Credit Societies
State Cooperative Agriculture and Rural Development Banks (SCARDBs) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs)
Industrial Co-operative Banks (State/Central)
Financial Corporation and Companies
1.2.6 Insurance corporations
1.2.7 Pension funds
Non- government Provident Funds
2.3 General government
2.3.1 Central government including social security
Liabilities
Financial Assets
Currency and deposits
Loans & Advances
Equity and Investment Fund shares (Investments)
Other accounts receivable
2.3.2 State government and Union Territories including social security
Liabilities
Debt Securities (Market Loans)
Loans (Borrowings)
Provident funds
Financial Assets
Currency and deposits
Loans and Advances
Investments (Debt and Equity)
2.3.3 Local government including social security
2.4 Rest of the World
2.5 Household and Non-profit Institutions serving Household Sectors
List of Formats
Format 1: List of Financial Instruments adopted in the Flow of Funds Accounts
Abbreviations

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 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, 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:

  1. the (opening and closing) balance sheets are not published in the Indian FOF accounts.

  2. 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),

  3. the Indian FOF accounts presents only the consolidated tables wherein the intra-sector transactions are netted out;

  4. 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;

  5. 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.

  6. 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.

  7. 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 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.

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
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 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  
    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.

Table 3: Sources of data5
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  
Cooperative non-credit societies 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 Form X returns (from DSIM)
Statistical Tables relating to Banks in India (from DSIM)
Section 42 returns (from DSIM)
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/ (DCBR) RBI
Urban Cooperative Banks DCBR, RBI  
Deposit-taking Non-Banking Finance Companies (NBFC- D) RBI (DNBR and 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 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)
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
  Cooperative non-credit societies 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 / 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 Government Union 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.

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

  1. Public and Private Limited Companies

  2. Private Power Sector Companies

  3. Private Port Trusts

  4. Cooperative Non-Credit Societies

2. Government departmental and non-departmental Commercial Undertakings

  1. Government departmental undertakings

  2. Central and State Public sector enterprises

  3. Port Trusts

  4. 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 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 nonfinancial) 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 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 nongovernment 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.

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 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)

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

48. The Annual Reports of the State Power Utilities/electricity boards provide details of their borrowings from Banks and Others. The borrowings from others include 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.

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 multiunit 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.

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 nongovernment provident funds(other than state provident funds) is a separate subsector, 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 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.

Equity (Paid-up capital)

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) 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 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 and deposits

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/subsectors, 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 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 and investment fund shares

Equity

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.

Other accounts receivable/payable

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 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) nonfinancial 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 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 and deposits

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

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.

Equity and investment fund shares

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 nonfinancial 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

  1. State Bank of India (SBI) and its subsidiaries,

  2. Public Sector Banks (including IDBI Bank),

  3. Private Sector Banks (old and new)

  4. Regional Rural Banks (RRBs),

  5. Foreign Banks operating in India.

  6. 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 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

Currency and deposits

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

  1. RBI

  2. SBI

  3. Associates of SBI

  4. Other Commercial Banks

  5. Co-operative Banks

b. From banks outside India

c. From financial institutions in India

  1. IDBI

  2. NABARD

  3. EXIM Bank

  4. 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 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 and deposits

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)

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, cashcredits 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.

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 accounts receivable/payable

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.

Non-Financial Assets

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

Currency and deposits

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 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

Equity (Paid-up capital)

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 paidup 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 and deposits

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

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‘.

Equity and investment fund shares

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 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.

Non-Financial Assets

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.

Currency and deposits

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.

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- 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 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 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 subsector. 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 breakdown 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

Currency and deposits

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

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.

Financial Assets

Currency and deposits

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.

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

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 and deposits

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.

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).

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


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    
  Non-Financial Corporations    
  Financial Corporations    
  Deposit-taking corporations    
  Insurance corporations    
  Pension funds    
  General Government    
  Long-term securities of    
  Non-Financial Corporations    
  Financial Corporations    
  General Government    
  Central Government    
  State Governments Local authorities    
F4 Loans    
  Short-term    
  Non-Financial Corporations    
  Financial Corporations    
  General Government    
  Long-term    
  Non-Financial Corporations    
  Financial Corporations    
  General Government    
F5  
F51 Equity    
  Listed Shares    
  Non-Financial Corporations    
  Financial Corporations    
  Unlisted Shares    
  Non-Financial Corporations    
  Financial Corporations    
  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    
  Non-Financial Corporations    
  Financial Corporations    
  General Government    
  Households and NPISHs    

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
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

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.

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).

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

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

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

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.

8 Data from private databases are also used.

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

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

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’.

12 For details please see RBI Sub-sector

13 The latest available is for the year _________.

14 Came into force with effect from 1-11-1952 under the Employees’ Provident Funds and Miscellaneous Act, 1952.


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