Sharp drop in Centre's borrowing from RBI

By Our Corporate Reporter

CHENNAI, AUG. 26. The borrowings of the Central Government declined sharply by Rs. 7,180 crores to Rs. 1,690 crores in the week ended August 18. This is on top of a decline of Rs. 4,032 crores registered in the previous week, according to the latest statistical supplement of the Reserve Bank of India.

Loans and advances of State governments also declined by Rs. 600 crores to Rs. 2,172 crores while these were higher by Rs. 283 crores in the week ended August 11.

Loans and advances of scheduled commercial banks rose by Rs. 584 crores to Rs. 7,250 crores during the week ended August 18.

Credit extended by scheduled commercial banks went up marginally by Rs. 206 crores in the fortnight ended August 11 with the outstanding at Rs. 4,57,709 crores.

The increase in the current financial year up to August 11 was Rs. 21,751 crores (5 per cent) as compared to only Rs. 4,570 crores (1.2 per cent) in the same period in 1999-2000.

While food credit registered a decline of Rs. 1,110 crores to Rs. 31,698 crores in the fortnight, there was an increase of Rs. 1,317 crores under non-food credit with the outstanding at Rs. 4,26,012 crores.

On a year-to-year basis, the growth in bank credit was Rs. 84,302 crores (22.6 per cent) as compared to Rs. 51,774 crores (16.1 per cent) in the corresponding previous period.

This was due to an increase in non-food credit by Rs. 74,664 crores (Rs. 46,710 crores) and in food credit by Rs. 9,638 crores (Rs. 5,064 crores).

Investments in government securities in the fortnight ended August 11 were marginally down (Rs. 65 crores) to Rs. 3,00,107 crores while investments in approved securities registered a rise of Rs. 132 crores to Rs. 30,911 crores. On a year-to-year basis the increase in government and other approved securities was Rs. 46,884 crores (16.5 per cent).

Investments in shares/debentures, bonds and commercial paper of public sector undertakings and in private corporate sector by scheduled commercial banks were up by Rs. 3,967 crores from March 24 to July 14 to Rs. 64,809 crores.

Reserve money has dropped by Rs. 1,995 crores in the current financial year up to August 18 against an increase of Rs. 6,308 crores with the outstanding at Rs. 2,78,319 crores. On a year-to- year basis, the increase under this was Rs. 12,666 crores (4.8 per cent).

The net RBI credit to government registered a decline of Rs. 8,585 crores with the outstanding at Rs. 1,55,909 crores on August 18.

Marginal decline in forex assets

Forex assets declined marginally by $33 million to $32,707 million in the week ended August 18 against $202 million in the earlier week.

While gold reserves were unchanged at $2,924 million, there was a decline of $10 million under special drawing rights to $2 million. Total reserves dropped by $43 million to $35,633 million in the week under reference.

The drop in FCAs from the end of March 2000 was $2.35 billion. Gold holdings have declined by $50 million, and SDRs by $2 million. The decline in total reserves was thus $2.40 billion.

On a year-to-year basis, growth in FCAs was 2.175 billion and gold holdings $270 million while SDRs declined by $7 million. The rise in total reserves on a yearly basis was $2.44 billion.

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