Reserve Bank of India (RBI) Balance Sheet

Notes issued as a percentage of GDP rises towards pre-demonetisation level.

Note: Published weekly by the Reserve Bank of India (RBI). Updated to the last weekend of November 2019. (Published on December 12, 2019)

Brief Overview

RBI Balance Sheet represents the central bank's monetary relationship with the commercial banks and the government. Lately, the RBI balance sheet has rapidly expanded and gone through transformations. Post-demonetisation the banknotes to GDP ratio fell, and it took time to rise up again. Now that three years have passed, banknotes to GDP ratio has risen back to pre-demonetisation level. In mid-2000s the domestic securities held by the RBI accounted for a mere 1% of GDP, while the foreign securities accounted for about 15%. In recent years, the size of domestic securities measured as % of GDP is much bigger, around 5%. This indicates that domestic securities are becoming a better tool for the RBI to control the financial market in India, perhaps as a tool to control the size of liquidity in India. To calculate components as a percentage of GDP,  we have used seasonally adjusted quarterly GDP data.

The RBI publishes the balance sheet on Friday every week. We at IMA take the balance sheet as of last Friday of the month for the monthly analysis. We notice that there is some inconsistency in the balance sheet of few months; hence we have made necessary changes to make the data consistent. For March 2011, we have used the balance sheet as of March 25. For May 2011, the values in RBI database are significantly high, and it is due to an extra digit (0) at the end of the numbers, we have removed the same in our data series to make it consistent. For September 2011, we have used the balance sheet series as of September 16, 2011, to normalise the foreign security value. For October and November 2011, RBI database shows a drop in Gold and Bullion which we think is not accurate, to normalise the same we have added a 0 at the end of the values for these two components. It is noteworthy that whenever the RBI has initiated liquidity absorption through market stabilisation scheme, the governement deposits have increased. 

For the annual series, to calculate components as a percentage of GDP, we have taken the GDP values for the period July-June for each year, so that it matches the estimation period of the RBI balance sheet. 

RBI Balance sheet-Annual

Note: The years are represented as per RBI's balance sheet estimation period which is between July to June. For instance, 2019 represents the period between July'18 - June'19.

For more information, please visit the official website.

Next release date: January 10th , 2020