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Date : Jan 28, 1999

Statement 6: Operating Environment : Pre-reform and Current Status

Resources*

Deployments*

Organisation

Remarks

Pre-reform

Current Status

Pre-reform

Current Status

Banks

Deposits

Cash & bank

Cash and bank

There is significant change in the resources being raised by banks and deployment avenues.

balance

Borrowings –

Inter-bank

Internal &

lending

lendings –

External

multi-currency

Capital and

Investments

Investments –

reserves

multi-currency

Other liabilities

Other

Loans and

and provisions

liabilities and

advances

advances –

provisions

multi-currency

Fixed assets

Other assets

Development

Financial

Institutions

IDBI,

Access to LTO

Access to LTO Funds withdrawn. Now borrowings are being placed atmarket related interest rates.

Medium and long-term loans in rupee and foreign currency (except IIBI).

While DFIs’ access to assured sources of funds has been withdrawn, the avenues for deployment of funds have widened.

ICICI,

Funds of RBI

IFCI,

and SLR Bonds^#

IIBI (IRBI) and

EXIM Bank

Investments

Short-term

loans/working

capital finance

Investments

Market

Long-term

TFCI

borrowings,

borrowings

finance to

borrowing from

tourism related

IDBI

activities

Refinancing

Institutions

NABARD,
SIDBI and
NHB

Borrowings from LTO Funds of RBI, SLR bonds,borrowings from government and IDBI (by SIDBI)

Access to LTO Fund withdrawn ^{# #}. Borrowings at market related interest rate, borrowings from other banks and FIs, SLR bonds (to a small extent)

Refinancing of medium and long-term loans

Some of the refinancing institutions have started extending direct finance even though refinancing continues to be their main business.

Refinancing institutions continue to have some access to concessional finance, though in a different form. Thus, refinancing institutions are relatively less affected as compared with DFIs.

Statement 6: Operating Environment : Pre-reform and Current Status (concld.)
	Resources*		Deployments*
Organisation						Remarks
	Pre-reform	Current Status	Pre-reform	Current Status

Investment
Institutions

UTI, LIC and GIC and its subsidiaries	From Investors/ policy holders	From Investors/ policy holders	Government securities, shares/stocks, bonds/ debentures of companies, and term loans	Government securities, shares/stocks, bonds/ debentures of companies, and term loans	i)	Until April 1, 1995, GIC andits subsidiaries were required to invest 70 per cent of fresh accretion to their funds in government securities and socio-oriented sector and remaining 30 per cent in the market. From April 1, 1995, these proportions were changed to 45 per cent and 55 per cent.
	From Investors/ policy holders	From Investors/ policy holders









					ii)	From November 1997, LIC has been given freedom to deploy 25 per cent of accretion to the Controlled Fund (after setting aside 75 per cent in government securities and socio-oriented sector). Earlier LIC was required to deploy 25 per cent of accretion to the Controlled Fund in specific proportions in private corporate sector, loans to policy holders, real estate, etc.












* Represent major resources and deployment of funds.
# LTO fund facility was not available to ICICI and IFCI.
## Only a token contribution of Rs.1 crore is being made to each of the two LTO Funds being maintained by NABARD. SIDBI gets small allocation out of repayments being made by IDBI to the LTO Fund.