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RBI's Monthly Bulletin For July 2017

The Reserve Bank of India today(10-Jul-2017) released the July 2017 issue of its monthly Bulletin. The Bulletin includes one speech by the Top Management, two articles and Current Statistics. The two articles are:
I. Finances of Foreign Direct Investment Companies, 2015-16.
II. International Banking Statistics of India: 2016.
I. Finances of Foreign Direct Investment Companies, 2015-16

This article presents the financial performance of non-government non-financial foreign direct investment (FDI) companies during the year 2015-16 along with a comparative picture over the three-year period of 2013-14 through 2015-16 on the basis of a common set of companies. Performance of these companies was also compared with non-FDI companies. FDI companies included in the study accounted for 40.4 per cent of the total paid-up capital of non-financial FDI companies reported in the Reserve Bank’s Census on foreign liabilities and assets of Indian direct investment companies.
  • Select FDI companies performed relatively better than non-FDI companies in 2015-16 although the performance of both FDI and non-FDI companies deteriorated during the year in terms of growth in sales and GVA as well as their profit.
  • The operating profit margin was maintained on account of the fall in the cost of raw materials.
  • Export intensity, measured as the ratio of exports to sales, of FDI companies weakened gradually over the three-year period with muted exports growth in 2015-16.
  • FDI companies were net earners of foreign exchange in 2015-16, reversing the pattern observed in the two preceding years mainly due to substantial contraction in their imports.
  • The FDI companies witnessed deleveraging in their capital structure during the three-year period. Funds raised by the FDI companies were predominantly used in fixed capital formation.

The aggregate and granular data pertaining to the finances of these companies for 2015-16 are available on the Reserve Bank’s website at DBIE.

II. International Banking Statistics of India : 2016

This article presents an analysis of the Locational Banking Statistics (LBS) and Consolidated Banking Statistics (CBS) based on international assets and liabilities. The data are analysed by type of instrument/components, currency, country of residence and sector of counter-party/transacting unit, and nationality of banks functioning in India. The data on CBS give international/ foreign claims as per residual maturity and sector of borrower along with the exposures by country of immediate borrower and on the reallocation of claims (i.e., risk transfers) to the country of ultimate risk. The related data have been released earlier through RBI website on June 30, 2017.

  • The international liabilities and claims of banks remained more or less stable in last three quarters of 2016 indicating stability in international activities of banks in India.
  • Among international liabilities of banks, the outflow of balances from FCNR(B) was compensated by increase in foreign currency borrowings and NRE balances.
  • On the claims side, decline in NOSTRO balances was compensated by increase in loans to non-residents and FC loans to residents.
  • Over all international banking exposure of banks in India remains very small relatively to global positions and as such the global cross border banking movements are mainly driven by major economies like, UK, USA, Japan, etc.

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