Please refer to the captioned statement being submitted to this department. It has been observed that banks are treating the Lending to Scheduled Banks under Reverse Repo as outright sale/purchase of securities in the captioned statement whereas the same is reported as Collateralized loans in weekly statement of position submitted to BSD. The different treatment of same transaction in the two statements creates inconsistency in the two set of data. As you are aware that Statistics Department has also revised the existing statement with Sectoral Balance Sheet which will be submitted through Data Ware House. The current statement will be discontinued once the submission of Sectoral Balance Sheet data by all banks is streamlined. During this
interim period the banks are advised to follow the underlying guidelines for the reporting Reverse Repo loans in captioned statement.

“The securities involved should remain on the balance sheet of cash taker  (the bank entering in Repo transaction) and the amount of loan/borrowing may be classified in the liabilities side of the statement under the head “Borrowing from Financial Institution Scheduled banks (Code = 083000)”.
Whereas the cash provider (the bank entering in Reverse Repo) should record the amount of Loan extended on assets side of the statement under the head “Advances to Scheduled Banks (Code = 261000)” instead of recording as Investment in Securities & Shares”.

2.   Further Placements with Banks Abroad may be treated as Balances Held Abroad in the captioned statement.

The above changes may be incorporated in the monthly statement of February 2006.