RBI - Monthly Bulletin - April 2011

Monthly Bulletin - April 2011

The Reserve Bank of India has released the April 2011 issue of its monthly RBI Bulletin. The April issue carries two special articles: (i) Inflation Expectations Survey of Households: December 2010 (Round 22) and (ii) International Banking Statistics for June and September 2010.

Highlights :

1. Inflation Expectations Survey of Households : December 2010 (Round 22)

The article presents the findings of 22nd round of the Inflation Expectations Survey of Households conducted in October – December 2010 quarter. The survey captures the inflation expectations of 4,000 urban households across 12 cities for the next quarter (January-March 2011) and for the next year (January-December 2011).

Main Findings

• Households expect inflation to rise further by 60 and 130 basis points during next quarter (12.4 per cent) and next year (13.1 per cent), respectively, from the perceived current rate of 11.8 per cent.

• Households’ expectations of general price rise were mainly influenced by movements in food prices.

• The percentage of respondents expecting price rise have gone up for all the product groups (viz., general prices, food and non-food product, households’ durables and housing), except cost of services.

• Daily-wage workers and housewives expected higher inflation rates compared to other categories.

• Across the cities, Bangalore expected the highest inflation and Patna the lowest.

2. International Banking Statistics for June and September 2010

The article presents analysis of international liabilities and assets of banks in India, classified as Locational Banking Statistics (LBS) and consolidated international/ foreign claims under Consolidated Banking Statistics (CBS), collected as per the reporting system of the Bank for International Settlements (BIS), for the quarters ended June and September 2010.

Main Findings

Locational Banking Statistics – International Liabilities

• The international liabilities (in Indian Rupees) of banks in India, at end-September 2010 grew by 15.0 per cent over the position a year ago and by 7.4 per cent over the previous quarter.
• The investment in the ADRs/GDRs and equities of the banking sector by non-residents registered a substantial growth over the position a year ago.
• At end-September 2010, the annual increase in the international liabilities is reflected in the increase towards the USA, UK, UAE, France, Hong Kong and Mauritius.
• The share of the international liabilities towards the non-bank sector was lower at 75.7 per cent compared with 76.2 per cent a year ago.

Locational Banking Statistics - International Assets

• At end-September 2010, the international assets (in Indian Rupees) of banks in India registered a growth of 24.1 per cent over the position a year ago and 8.7 per cent over the previous quarter.

• The components, NOSTRO balances, loans to non-residents and outstanding export bills contributed to the increase over the previous quarter, while almost all components registered a moderate to substantial growth over the previous year.

• For the quarter, the share of the non-bank sector in the international assets increased to 66.9 per cent from 65.1 per cent for the previous year.

• At end-September 2010, a sharp increase (from 58.0 per cent to 72.8 per cent) was observed in the share towards the non-bank sector for the international assets denominated in US Dollar over the position a year ago.

Consolidated Banking Statistics

• The annual growth in consolidated international claims (in Indian Rupees) of banks based on country of immediate risk, as at end-September 2010, was 5.8 per cent compared with 23.5 per cent registered a year ago.
• Consolidated international claims of Indian banks on immediate risk basis, as at end-September 2010, continued to be of short-term nature (less than one year) and accounted for 61.2 per cent of total claims compared to 61.0 per cent a year ago.