RBI skipped releasing its weekly balance sheet for 30 June 2017!

Apologies for waking up really late to this development (HT: Amit Varma)

As per RBI Act Section 53:

(1) The Bank shall prepare and transmit to the [Central Government] a weekly account of the Issue Department and of the Banking Department in 
[such] from as the [Central] Government] may, by notification in the Gazette of India, prescribe. The [Central Government] shall cause these accounts to be  [published in the Gazette of India at such intervals and in such modified form as it may deem fit].
(2) The Bank shall also, within two months from the date on which the annual accounts of the Bank are closed, transmit to the [Central Government] a copy of the annual accounts signed by the Governor, the Deputy Governors and the Chief Accounting Officer of the Bank, and certified by the auditors, together with a report by the Central Board on the working of the Bank throughout the year, and the [Central Government] shall cause such accounts and report to be published in the Gazette of India.

Based on this, RBI prepares its balance sheet every week with a lag of 7 days. This becomes part of RBI’s Weekly Statistical Supplement (WSS) which is actively sought and analysed by analysts. A week lag means that RBI releases the balance sheet of previous Friday closing. So let’s say coming Friday falls on 21 July 2017. RBI will be releasing the balance sheet for the period ending on 14 July 2017 and so on

Post-demonetisation, the value of WSS was immense as RBI was bound by its own law to release the crucial data on notes in circulation, etc.

The second aspect of Section 53 states RBI has to release its annual accounts within 2 months of its closure of accounts. The accounts close every year on 30th June and RBI has to release its accounts by 31 August of the same year.

Now it so happened that we had one of the Fridays falling on 7 July 2017. Thus, RBI was supposed to release its balance sheet for the date ending 30 JUne 2017. This date is also its date for annual closure of accounts.

But guess what? RBI did not release the balance sheet on 30 June 2017! On the statement released on 7 July it included data for 23 June 2017 and said:

# The figures for Friday, June 30, 2017 will be published as part of RBI’s Balance Sheet in August 2017 in the Annual Report of the Bank.

I checked some previous such instances where July 7 was a Friday. It was the case in 2006 but as we can see it included data for June 30.

What is even more frustrating is RBI not issuing any press release etc for this decision. It is linked to demonetisation but skipping one week balance sheet will not happen. It started releasing subsequent data from 7 July 2017 onwards as seen in WSS of 14 July 2017:

1. Reserve Bank of India – Liabilities and Assets *
(₹ Billion)
Item 2016 2017 Variation
Jul. 8 Jun. 23# Jul. 7 Fortnight Year
1 2 3 4 5
1 Notes Issued 17,309.53 15,074.56 15,175.18 100.62 –2,134.35
1.1 Notes in Circulation 17,309.38 15,074.43 15,175.06 100.63 –2,134.33
1.2 Notes held in Banking Department 0.15 0.13 0.12 –0.01 –0.03
2 Deposits
2.1 Central Government 1.00 1.01 1.00 –0.01
2.2 Market Stabilisation Scheme 946.73 946.73 946.73
2.3 State Governments 0.42 7.57 0.42 –7.14
2.4 Scheduled Commercial Banks 3,884.46 4,295.11 4,286.52 –8.59 402.06
2.5 Scheduled State Co-operative Banks 34.73 37.13 37.60 0.46 2.86
2.6 Other Banks 228.26 267.06 272.06 4.99 43.79
2.7 Others 846.03 3,281.29 3,771.61 490.32 2,925.58
3 Other Liabilities 9,893.91 8,651.26 8,725.99 74.73 –1,167.92
TOTAL LIABILITIES/ASSETS 32,198.35 32,561.72 33,217.11 655.39 1,018.76
1 Foreign Currency Assets 22,908.90 23,378.93 23,675.20 296.27 766.30
2 Gold Coin and Bullion 1,391.30 1,297.09 1,317.32 20.23 –73.98
3 Rupee Securities (including Treasury Bills) 7,028.16 7,497.13 7,451.28 –45.85 423.12
4 Loans and Advances
4.1 Central Government 8.65 105.36 622.83 517.47 614.18
4.2 State Governments 25.13 19.30 46.89 27.59 21.75
4.3 NABARD
4.4 Scheduled Commercial Banks 611.02 15.40 27.45 12.05 –583.57
4.5 Scheduled State Co-op.Banks
4.6 Industrial Development Bank of India
4.7 Export-Import Bank of India
4.8 Others 40.30 36.25 28.98 –7.28 –11.32
5 Bills Purchased and Discounted
5.1 Commercial
5.2 Treasury
6 Investments 23.20 33.20 33.70 0.50 10.50
7 Other Assets 161.69 179.06 13.46 –165.60 –148.23
* Data are provisional.
# The figures for Friday, June 30, 2017 will be published as part of RBI’s Balance Sheet in August 2017 in the Annual Report of the Bank.

As we can guess, the figures for 30 June will be between the figures of 23 Jun 2017 and 7 July 2017. How would it have mattered, unless WSS data cannot be relied upon?

Also RBI used to earlier call the 5th column in the above as Variation- Fortnight. It used to be weekly earlier.

One is not really sure what is going on here. If this was indeed a special case for omission which goes against the RBI Act, there should have been a special notice of the same…

 

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