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Date: 01 Mar 2002
Report of the Technical Group on Statistics of International Trade in Services

Reserve Bank of India
Mumbai
March 2002

Contents

Chapter I Introduction

Chapter II Implications of the Manual on Statistics of International Trade in Services

Chapter III Data Collection Procedure

Chapter IV Summary and Recommendations

Annexures

2.1 Extended Balance of Payments Services Classifications

3.1 New Purpose Codes for Reporting Forex Transactions-Receipt Purposes

3.2 New Purpose Codes for Reporting Forex Transactions-Payment Purposes

3.3 Revised Form A2

3.4 Summary Distribution of New Critical AD Branches

List of Abbreviations

ADs

Authorised Dealers

BoP

Balance of Payments

BPM5

IMF Balance of Payments Manual (Fifth Edition)

BTC

Bankers’ Training College

CPC

Central Product Classification

DEAP

Department of Economic Analysis and Policy

DESACS

Department of Statistical Analysis and Computer Services

DIF

Division of International Finance

EBOPS

Extended Balance of Payments Services

EC

European Commission

ECD

Exchange Control Department

FATS

Foreign Affiliates’ Trade in Services

FDI

Foreign Direct Investment

FET-ERS

Foreign Exchange Transactions Electronic Reporting System

FIEO

Federation of Indian Exporters Organisation

GATS

General Agreement on Trade in Services

IMF

International Monetary Fund

MSITS

Manual on Statistics of International Trade in Services

NASSCOM

National Association of Software and Service Companies

OECD

Organisation for Economic Cooperation and Development

RBI

Reserve Bank of India

SBI

State Bank of India

SBIICM

State Bank of Institute of Information and Communication Management

SDDS

Special Data Dissemination Standards

SNA

System of National Accounts

UN

United Nations

WTO

World Trade Organisation

 

Report of the Technical Group on Statistics of International Trade in Services

Chapter 1: Introduction

1.1 The Reserve Bank of India (RBI) has primary responsibility of compilation and dissemination of balance of payments (BoP) statistics. The foreign exchange transactions reported through R-returns by authorised dealers (ADs) essentially form the basis of compilation of BoP statistics which are disseminated on a quarterly basis with a lag of a quarter. The conceptual framework of compilation of the BoP is consistent with the standard set out in the 5th Edition of the International Monetary Fund (IMF) Balance of Payments Manual (BPM5). During the recent period, however, there has been pressing demand for disaggregated data on the services component of the BoP from international agencies as also from the standpoint of our trade negotiations with the World Trade Organisation (WTO).

1.2 The emerging requirement calls for finer disaggregation of various BoP components recommended under BPM5. For instance, travel needs to be further classified into business travel, medical travel, education related travel etc. while transportation is required to be broken into sea transport, air transport and other transport with further sub-classification into passenger, freight and others. The timely and disaggregated BoP data, in turn, are critical for appropriate policy response to various developments and have attained an added importance in view of the following three major recent developments:

  • acceptance of obligations by India under the IMF's Special Data Dissemination Standards (SDDS).
  • requirement of disaggregated data on services as per the Inter-Agency Task Force’s Manual on Statistics of International Trade in Services (MSITS).
  • the inclusion of services and the concomitant negotiations under the WTO jurisdiction.

1.3 In addition to disaggregated data, the details of the country of the source of funds are also required to analyse BoP developments with partner countries. This information forms an important input for bilateral discussions with the visiting delegations from other countries. Country-wise details are also needed for certain policy purposes like double taxation treaties.

1.4 Against this background, in one of the meeting of the Standing Committee on Balance of Payments it was suggested by the Chairman of the Committee (Dr. Y.V. Reddy, Deputy Governor, Reserve Bank of India) that a technical group may be set up with representation from the concerned agencies to examine the purpose of modifying the data reporting mechanism for foreign exchange transactions by ADs to capture statistics on international trade in services in a more disaggregated form.

1.5 Accordingly, the RBI constituted this Technical Group on Statistics of International Trade in Services in November 2000 with the following members.

1.

Shri Deepak Mohanty
Director, Division of International Finance
Department of Economic Analysis and Policy
Reserve Bank of India

Convenor

2.

Dr.H.A.C. Prasad
Economic Adviser
Ministry of Commerce

Member

3.

Shri R.S. Ahlawat
Additional Economic Adviser
Department of Economic Affairs
Ministry of Finance

'

4.

Shri N. Chandrasekaran
General Manager
International Banking Division
State Bank of India

'

5.

Shri P.A. Sethi
General Manager
International Operations
Bank of Baroda

'

6.

Shri R.N. Deodhar,
General Manager,
Exchange Control Department,
Reserve Bank of India

'

7.

Dr. C.L. Agarwal,
Director,
Department of Statistical Analysis and Computer Services,
Reserve Bank of India

'

8.

Shri Ashok Sahoo,
Assistant Adviser,
Division of International Finance
Department of Economic Analysis and Policy
Reserve Bank of India

Member Secretary

Terms of Reference

1.6 The Technical Group has the following terms of reference :

  1. To examine the implications of the draft Manual on Statistics of International Trade in Services (MSITS) prepared by the Task Force drawn from European Commission (EC), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), United Nations (UN) and World Trade Organisation (WTO) for India’s Balance of Payments (BoP) statistics.
  2. To suggest appropriate modifications to ‘purpose codes’ for recording foreign exchange transactions reported through R-returns by the Authorised Dealers (ADs).
  3. To suggest relevant revisions to pre-printed A-2 form.
  4. To suggest revisions to Foreign Exchange Transactions Electronic Reporting System (FET-ERS) software package.
  5. To suggest training programmes for officials of critical AD branches for smooth transition to the new reporting mechanism.
  6. Any other relevant issues.

Acknowledgements

1.7 The Group places on record its grateful thanks to Dr.Y.V. Reddy, Deputy Governor, RBI for providing encouragement and taking active interest in its proceedings. The Group had the benefit of the guidance of Shri M.R. Nair, Officer-in-Charge, DEAP, RBI in its deliberations. The Group wishes to record its high appreciation of technical help received from S/Shri Muneesh Kapur, Assistant Adviser, DIF, DEAP, RBI, Shri Brijesh P, Research Officer, DIF and Shri S.B. Gogate, Assistant Manager, DIF, DEAP, RBI. The Group expresses its thanks to Shri S.S. Jogale of RBI for his assistance.

Organisation of the Report

1.8 The remainder of the report has been organised in three chapters. Chapter 2 examines the implications of draft Manual on Statistics of International Trade in Services (MSITS) prepared by the Task Force drawn from international agencies for India’s BoP statistics. Chapter 3 suggests necessary modifications to the reporting mechanism of foreign exchange transactions by the ADs and deals with the logistics for quick implementation of revised reporting framework. The last chapter contains the summary and recommendations.

Chapter 2: Implications of the Manual on Statistics of International Trade in Services

2.1 The format of presentation of the balance of payments (BoP) data in India broadly follows the recommendations of the 5th Edition of the IMF Balance of Payments Manual (BPM5). According to the BPM5, services cover items such as travel, transportation, communications, financial services, computer and information services, royalties, license fees and other business services given their importance in international transactions (Box 2.1)

Box 2.1 : An overview of the main BPM5 services components

    1. Transportation
    2. Travel
    3. Communications services
    4. Construction services
    5. Insurance services
    6. Financial services
    7. Computer and information services
    8. Royalties and licence fees
    9. Other business services
    10. Personal, cultural and recreational services
    11. Government services n.i.e.

2.2 Recently, a Manual on Statistics of International Trade in Services (MSITS) has been prepared by the Task Force on Statistics of International Trade in Services drawing representation from European Commission, IMF, OECD, United Nations and WTO. The Extended Balance of Payments Services (EBOPS) classification of transactions between residents and non-residents recommended in MSITS is a further extension of the OECD-Eurostat classification and provides information required by the WTO in connection with the GATS agreement. The principal aim of the manual is to meet user needs and to facilitate evaluation of market access opportunities and the assessment of the extent of opening up achieved in specific services and markets.

2.3 The conceptual framework of MSITS is so designed as to make it compatible with related international standards such as the BPM5, the System of National Accounts (SNA) 1993 and the Central Product Classification (CPC). The Manual builds on the strengths of these existing systems to develop an extended statistical framework for the compilation of statistics of international trade in services.

2.4 The BoP data components according to the EBOPS Classification, which involves disaggregating the BPM5 standard components for services into sub-components of major economic importance are given in Annexure 2.1. The Group examined all the components proposed under EBOPS for their relevance. The Group is of the view that while disaggregated information under most of the component would be useful, data on certain components such as space transport, rail transport and inland waterway transport may become relevant in the Indian context at a later date when negotiations on multi-modal transport take place. The Group, therefore, recommends that the EBOPS components may be adopted with suitable modifications to capture the important items in India’s international transactions in services.

2.5 Furthermore, the manual distinguishes service transactions by four modes of supply such as: (i) cross-border supply, (ii) consumption abroad, (iii) commercial presence and (iv) presence of natural persons.

2.6 Apart from implementation of the BPM5 recommendations and compilation of disaggregated BoP data according to EBOPS classification, the full implementation of the provisions of MSITS involves collection of certain additional statistics such as (i) recording of certain basic Foreign Affiliates’ Trade in Services (FATS) Statistics such as number of enterprises, value added, sales, exports, imports etc. (ii) collection of complete foreign direct investment (FDI) statistics, (iii) compilation of statistics on BoP transactions for trade in services by partner country for services exports and imports, (iv) compilation of additional FATS statistics. The broad mapping of the BoP standard components to the four modes of supply is given in Box 2.2.

Box 2.2 : Statistical Coverage of Modes of Supply

Mode

Statistical Coverage (BPM5 and FATS)

Mode 1

Cross border supply

BPM5 : Transportation, communications services, insurance services, financial services, royalties and licence fees

Part of : Computer and information services, other business services, and personal, cultural and recreational services.

Mode 2

Consumption abroad

BPM5 : travel (excluding goods bought by travelers)

Mode 3

Commercial presence

FATS : FATS Statistics, each ICFA category (sales, value added, etc.)

BPM5 : Construction services

Mode 4

Presence of natural persons

BPM5 : Part of : computer and information services, other business services and personal, cultural and recreational services

FATS (supplementary information ) : foreign employment in foreign affiliates

BPM5 (supplementary information) : labour related flows

2.7 Analysis of the international best practices indicates that most of the countries rely upon well-designed and periodical surveys to garner information on trade in services. Therefore information at a disaggregated level can be obtained on the basis of periodic and well-designed surveys rather than relying on banks for regular information on all transactions.

2.8 In this regard, the Group recommends that identification of associations, bodies and forums of business, professional and technical services (such as legal, accounting, management, advertising, market research, architectural, engineering, mining, agricultural services etc.) for collecting information on the receipts on account of export of various items of services would be desirable to supplement the data obtained through banking source.

Annexure 2.1

Extended Balance of Payments Services Classification – EBOPS

Component

1.

Transportation

 

1.1

Sea transport

   

1.1.1

Passenger

   

1.1.2

Freight

   

1.1.3

Other

 

1.2

Air transport

   

1.2.1

Passenger

   

1.2.2

Freight

   

1.2.3

Other

 

1.2

Other transport

   

1.3.1

Passenger

   

1.3.2

Freight

   

1.3.3

Other

 

Extended Classification of other transport (1.3)

 

1.4

Space transport

 

1.5

Rail transport

   

1.5.1

Passenger

   

1.5.2

Freight

   

1.5.3

Supporting, auxiliary, and other services

 

1.6

Road transport

   

1.6.1

Passenger

   

1.6.2

Freight

   

1.6.3

Supporting, auxiliary, and other services

 

1.7

Inland waterway transport

   

1.7.1

Passenger

   

1.7.2

Freight

   

1.7.3

Supporting, auxiliary, and other services

 

1.8

Pipeline transport

 

1.9

Other supporting and auxiliary transport services

     

2.

Travel

 
 

2.1

Business

   

2.1.1

Expenditure by seasonal and border workers

   

2.1.2

Other

 

2.2

Personal

   

2.2.1

Health-related expenditure

   

2.2.2

Education-related expenditure

   

2.2.3

Other

   

3.

Communications services

 

3.1

Postal and courier services

   

3.1.1

Postal services

   

3.1.2

Courier services

 

3.2

Telecommunication services

   

4.

Construction services

 

4.1

Construction abroad

 

4.2

Construction in the compiling economy

 

4.3

Construction services provided

 

4.4

Purchases by construction enterprises

   

5.

Insurance services

 

5.1

Life insurance and pension funding

 

5.2

Freight insurance

 

5.3

Other direct insurance

 

5.4

Reinsurance

 

5.5

Auxiliary services

   

6.

Financial services

 

6.1

Financial intermediation except investment banking

 

6.2

Investment banking and services related to investment banking

 

6.3

Services auxiliary to financial intermediation

   

7.

Computer and information services

 

7.1

Computer services

 

7.2

Information services

   

7.2.1

News agency services

   

7.2.2

Other information provision services

   

8.

Royalties and license fees

 

8.1

Franchises and similar rights

 

8.2

Other royalties and license fees

   

9.

Other business Services

 

9.1

Merchanting and other trade-related services

   

9.1.1

Merchanting

   

9.1.2

Other

 

9.2

Operational leasing services

 

9.3

Miscellaneous business, professional, and technical services

   

9.3.1

Legal, accounting, management consulting, and public relations

     

9.3.1.1

Legal services

     

9.3.1.2

Accounting, auditing, book-keeping and tax consulting services

     

9.3.1.3

Business and management consultancy and public relations services

   

9.3.2

Advertising, market research, and public opinion polling

   

9.3.3

Research and development

   

9.3.4

Architectural, engineering, and other technical

   

9.3.5

Agricultural, mining, and on-sight processing

     

9.3.5.1

Waste treatment and depollution

     

9.3.5.2

Agricultural, mining and other processing services

   

9.3.6

Other

   

9.3.7

Services between related enterprises, n.i.e.

   

10.

Personal, cultural, and recreational services

 

10.1

Audio-visual and related services

 

10.2

Other personal, cultural, and recreational services

   

10.2.1

Educational services

   

10.2.2

Health services

   

10.2.3

Other

   

11.

Government services, n.i.e.

Chapter 3 : Data Collection Procedure

3.1 The Group reviewed the extant compilation procedure of BoP statistics in India with an emphasis on disaggregated data on international trade in services. The classification of India’s BoP statistics into various accounts and components is done with the help of purpose-wise disaggregated data reported by the critical Authorised Dealers (ADs), essentially banks, through floppy media following the recommendations of the Sub-Group on Reporting of Foreign Exchange Transactions by Authorised Dealers (Chairman : Shri S.P. Paniyadi). The Sub-Group had identified 417 AD branches out of 2500 AD branches which accounted for 80 per cent of total foreign exchange transaction in 1997 as critical AD branches for the collection of data through floppy media. On the basis of the recommendations of the Paniyadi Sub-Group, the list of purpose codes was thoroughly revised in April 1997. Currently data are collected by the RBI from the ADs for 7 groups comprising of around 60-65 purpose codes.

3.2 Inward/outward remittances, other than merchandise trade, can be analytically classified in to the following broad groups:

    • services (travel, transportation, insurance, financial services, software services, royalties, management fees, other services, etc.,),
    • income (interest, dividends and compensation of employees),
    • transfers (worker remittances, gifts/donations and official transfers) and
    • capital flows (FDI flows, portfolio flows, flows on account of external commercial borrowings , external assistance, NRI deposits etc.)

3.3 The purpose codes prescribed by the Paniyadi Sub-Group covered disaggregated data on most of the above items. The Group noted that the floppy based data reporting mechanism has worked satisfactorily and has resulted in considerable reduction in time lag in reporting of BoP data. The Group, therefore, proposes that the floppy based reporting mechanism may be continued with revision of purpose codes to capture disaggregated items of data required for EBOPS.

3.4 The data base for the floppy based reporting system at the level of ADs emanates from the existing exchange control requirements, which requires customers of all individual inward remittances, routed through the banking system, above the cut-off limit (presently US $ 10,000, say Rs 5,00,000) to indicate the purpose of the transaction and the country of the source of funds to the bank. This requirement is not imposed on transactions below the cut-off limit which are known as "unclassified receipts". A sampling procedure has, however, been adopted under which the selected branches of banks are required to collect purpose-wise/country-wise details of unclassified receipts only for two days in the reporting fortnight. The proportions emerging from the sample results are then applied to the aggregate of 'unclassified receipts'.

3.5 The international practices with regard to recording BoP data indicate that most of the countries use a combination of the foreign exchange transactions reported through banking channel and surveys/census to gather the necessary details. While the banking data evolved as by-products of foreign exchange control systems in a number of countries, the relaxation of exchange control over a period of time and the need to collect an extended break-down of various categories has necessitated more frequent use of surveys. The IMF's Balance of Payments Compilation Guide has recommended the use of either of the approaches or a combination of the two approaches for data compilation. The Group feels that as exchange regulations are relaxed over time, it would be increasingly difficult to obtain various disaggregated information from banking channel. Hence, greater reliance would have to be placed on surveys for obtaining various details.

3.6 As such in the Indian context, a combination of banking data and surveys design is employed to gather details. For receipts above a certain cut-off limit, all details are collected by reporting banks. The details of transactions below the cut-off limit are collected through surveys. The information is supplemented by various focused surveys like surveys on freight and insurance, the NASSCOM survey of software companies, etc. The Group recommends that while the present practice of reliance on bank data and surveys may continue, it would be desirable to strengthen both the channels.

3.7 Table 3.1 lists out the frequency distribution of receipts by size for the recent period. The column "number of transactions" in the Table provides the frequency distribution of the number of transactions under various categories ranging from amount up to Rs. 1 lakh to amount above Rs.50 lakh, while the column "value of transactions" provides a frequency distribution of total value of foreign exchange receipts.

Table 3.1 : Frequency Distribution of Foreign Exchange
Receipts for other than Merchandise Exports


Period

1997-98 (April-March)

1998-99 (April-March)

1999-2000(April-March)


 

Number of Transa-ctions (lakh)

Value of Transa-ctions
(Rs. crore)

Number of Transa-ction (lakh)

Value of Transa-ctions (Rs. crore)

Number of Transa-ctions (lakh)

Value of Transa-ctions (Rs. crore)


Total number/
Value

243.2

1,26,709

307.6

1,36,362

425.7

1,91,966

Frequency Distribution (%)

Amount (in Rs.)

      

Up to one lakh

98.95

36.1

98.24

36.3

97.92

22.1

1-5 lakh

0.69

2.9

1.37

6.4

1.61

6.9

5-10 lakh

0.13

1.8

0.17

2.7

0.19

2.5

10-15 lakh

0.05

1.2

0.06

1.7

0.07

1.6

15-20 lakh

0.03

1.1

0.03

1.1

0.03

1.1

20-25 lakh

0.02

0.8

0.02

1.1

0.03

1.1

25-50 lakh

0.05

3.3

0.05

3.7

0.05

3.6

Above 50 lakh

0.07

52.7

0.06

47.0

0.08

61.1

Total

100.0

100.0

100.0

100.0

100.0

100.0


3.8 It could be seen from Table 3.1 that total number of transactions increased sharply from 243.2 lakh during 1997-98 to 307.6 lakh during 1998-99. The number of transactions during 1999-2000 stood at 425.7 lakh. Frequency distribution indicates that while the number of transactions with individual receipts in the range of Rs.1-5 lakh constituted around 97.9 – 98.9 per cent of total transaction, their value in total transactions fell sharply from 36 per cent in 1997-98 to 22 per cent in 1999-2000. The Group noted that the quality of reporting suffers because of large number of small transactions as evident from the past experience. The Group, therefore, is of the view that there is a need for periodic review of the cut-off limit. While this process would reduce the reporting burden on the banks, it would enhance the quality of reporting.

3.9 The Group noted that the cut-off limit has already been raised to US $ 10,000 (about Rs. 4.9 lakh at current exchange rates) effective January 2001. The cut-off limit is reviewed on an ongoing basis. The cut-off limit was Rs. 10,000 till March 1992 and then raised to US $ 50,000. The cut-off limit translated to around Rs.15,00,000 at the exchange rate prevailing in April 1992 and around Rs. 18,00,000 by March 1997 reflecting the nominal depreciation of the rupee. However, as a significant amount - around two-thirds in value terms - of transactions exceeded the cut-off limit and which coupled with poor response to surveys had a bearing on the quality of data, the limit was revised down to Rs. 1,00,000 in April 1997. In dollar terms, the limit was around US $ 2,750 in April 1997 or around US $ 2,100 at current rates.

3.10 The Group is of the view that since the ADs would have to report the value of transactions in Rupees, the prescription of a cut-off limit in US dollar terms may give rise to ambiguities in terms of cross-currency transaction of value. The Group, therefore, recommends that for the purpose of data reporting the cut-off limit may be placed at Rs.5,00,000 which is slightly higher than US$ 10,000 at the current exchange rate. The ADs should be required to report disaggregated data for receipts over Rs.5,00,000 and the information for receipts up to Rs.5,00,000 may be collected through surveys.

3.11 The survey on unclassified receipts collects purpose-wise information for receipts up to Rs.1,00,000 ( up to Rs. 5,00,000 since January 2001). The Group recommends that the RBI should change the survey design to capture purpose/country-wise information for receipts up to Rs.5,00,000 from a representative sample of critical AD branches based on their performance in recent period.

3.12 The Group feels that the need for having disaggregated information has to be weighed against the additional burden it would entail on the AD branches to furnish this information. Since the thresh-hold limit for reporting of individual inward remittance has already been raised from Rs. 1,00,000 to US $ 10,000 effective January 2001 (Rs.5,00,000 proposed by the Group), this would significantly reduce the reporting burden on the commercial banks. In this direction, the ‘purpose list’ could be expanded to a manageable level by choosing important items. As ADs would be required henceforth to report detailed information for a less number of transactions, the Group is of the view that it should be feasible to capture more disaggregated statistics with revision of purpose codes.

3.13 The Group feels that keeping in view the dynamic nature of trade in services, the coding system should have the desired flexibility to easily accommodate changes from time to time in the ‘purpose’ list. In the extant reporting mechanism through floppy media, all transactions are broadly classified as sales (outward remittances) and purchases (inward remittances) with a prefix ‘S’ and ‘P’, respectively. The Group, therefore, recommends a four-digit coding system with the first two digits representing the main components and the last two digits indicating further disaggregation of the main components. Keeping in view the requirements of EBOPS and the format of the extant reporting mechanism, the Group recommends that disaggregated data may be collected under 15 major purpose groups (Box 3.1). The main services group numbers ‘02’ to 12’ exactly conform to the EBOPS classification. Since , the ADs are required to report all foreign exchange transactions, other main group codes for capital account (00), exports/imports of goods (01), transfers (13), income (14) and others (15) have been rearranged.

Box 3.1 : List of Major Purpose Groups

Group Numbers Main Group Names

    1. Capital Account
    2. Exports/Imports of Goods
    3. Transportation
    4. Travel
    5. Communication Service
    6. Construction Service
    7. Insurance Service
    8. Financial Services
    9. Computer Information Services
    10. Royalties / License Fees
    11. Other Business Services
    12. Personal, Cultural and Recreational Services
    13. Government not included elsewhere (G.n.i.e.)
    14. Transfers
    15. Income
    16. Others

3.14 The Group proposes introduction of additional codes for reporting of inter-bank transaction and ADs’ transactions with the RBI (to be entered as a single-entry in a fortnight) to facilitate periodic validation of the data.

3.15 At the disaggregated level, the Group proposes increase in the number of purpose codes for purchases from 58 to 86 and for sale from 64 to 98. The revised purpose codes are given in Annexures 3.1 and 3.2. While the number of codes would increase by 62, the Group feels that the reporting burden on the ADs would not increase as the ADs would be required to provide regular disaggregated data for less number of transactions with the increase in the cut-off limit to Rs.5,00,000. The Group recommends that the software package circulated by the RBI to the ADs for the purpose of reporting BoP data may be modified to provide drop-down menus under various groups, so that it should be convenient for the ADs to feed relevant information.

3.16 The Group recommends that for the purpose of the survey of ‘unclassified receipts’, the selection of critical branches may be based on reporting of non-export receipts of at least Rs.5 crores in a year. Sample of branches may be drawn separately for 'Foreign Currency Receipts' and 'Rupee Receipts' as the coverage of purposes under these two categories could be significantly different. These selected AD branches may report purpose-wise details of receipts under Rs.5,00,000 for two days in a fortnight instead of four days as is the current practice for the extant survey. In this process, the Group feels that while the sample size could be enlarged, reporting burden could be reduced without loss of details.

3.17 For payment other than imports and remittances covering intermediary trade, the purchasers of foreign exchange are required to fill in form A2 with ADs. The purpose code enlisted in form A2 forms the basis of recording R-return data by the ADs. In view of the revision of the purpose code, the Group also undertook the exercise of revising the form A2. Notwithstanding the proposed increase in the number of codes from 64 to 98 (Annexure 3.2) at the disaggregated level, the Group is of the view that that the contents of the form A2 should be confined to a single sheet for the convenience of the recording of the information. The revised form A2 is given in Annexure 3.3. While one side of the single sheet form provides the space for the required particulars of the remittances, the other side of the form gives a complete list of the purpose of remittances for easy identification. The Group recommends that the existing form A2 may be, replaced by the revised form A2 to reflect changes in the purpose codes at the disaggregated level.

3.18 The Group is of the opinion that the new reporting mechanism could be facilitated by giving wider publicity so as to sensitise the officials in AD branches working at the operational level. It is also essential that the bank customers appreciate the need for proper reporting of their foreign exchange transactions which is critical for improving BoP data. The Group, therefore, feels that the report of the Group should be published and placed on the RBI website. The Group recommends that copies of the published report should be provided to ADs; concerned ministries, such as Ministry of Commerce, Ministry of Tourism, Ministry of Labour etc.; and also to trade organizations, such as NASSCOM and FIEO.

3.19 The Group is of the view that apart from the wide publicity given to the need for detailed statistics on trade in services, the quality of reporting of data would depend significantly on structured training given to the concerned officials of the ADs, who would be operating the software at the branch level or would be training such officials in their respective banks. For the purpose of training, the Group identified 500 critical AD branches on the basis of volume of transactions as at the end of March 2000. The region-wise and bank-wise list of the critical AD branches is given in Annexure 3.4. It could be seen that out of the identified 500 critical branches, major number of branches are in Mumbai region (179), followed by New Delhi (81), Chenai (59) and Calcutta (41). The Group is of the view that while the RBI should take an initiative for the training programme, there is a need for support from the commercial banks in terms of making available their training infrastructure to conduct the required training. For this purpose the RBI may design an appropriate training programme which could be of duration of two days. The Group recommends that the training programme should be a hands-on computer based training to familiarise bank personnel with the practical aspects of the new data reporting mechanism.

3.20 Keeping in view the regional distribution of critical AD branches and the available training infrastructure of the RBI and commercial banks, the Group has drawn an indicative training programme which is given in Table 3.2. It is suggested that training of AD officials in batches of 20 participants may be conducted in major centres. The Group recommends that in order to enhance the effectiveness of the training programme the RBI should circulate in advance the revised computer software programme and copies of the Technical Group Report to enable the ADs to familiarise themselves with the requirements before hand.

Table 3.2 : Indicative Programme of Training of AD Official

Centre

Likely Venue

Remarks

No.AD branches

Hyderabad #

SBIICM, Hyderabad & SBI Training Centre at Hyderabad (for last module)

Two batches (of two days) for SBI.#
One batch for other ADs & SBI branches in Hyderabad

72

Bangalore

RBI office or Canara Bank/SBI Training Centre

One batch

25

Kochi

Federal Bank’s training centre at Alwaye

One batch

18

Chennai

Staff College

Two batches

48

Calcutta

ZTC Calcutta Zonal Training Centre (ZTC)

Two batches (including ECD representatives from Bhubaneswar, Patna & Guwahati)

34

New Delhi

ZTC, New Delhi

Four batches (including ADs from Kanpur & Chandigarh)

25

Mumbai

Bankers’ Training College (BTC)

Nine batches (including ADs from Jaipur, Panaji & Bhopal)

172

Total No. of training batches : 23

# May be split in (a) one batch for training faculty from SBI’s training centers and some important branches, and (b) One batch for 20-25 major branches of SBI (from a total of 79 branches)

3.21 The Group recommends that while the present floppy based reporting mechanism may continue, the critical ADs should be encouraged to report data through e-mail to the RBI to further reduce the time lag of reporting. The Group feels that the AD branches which have become ‘non-critical’ should be encouraged to continue the reporting of foreign exchange transactions through floppy media. The Group also recommends that the RBI should consider extending the floppy based reporting system to non-critical AD branches.

Annexure 3.1

NEW PURPOSE CODES FOR REPORTING FOREX TRANSACTIONS
RECEIPT PURPOSES

Group No.

Purpose Group Name

Purpose Code

Description

00

Capital Account

P0001

Repatriation of Indian investment abroad in equity capital (shares)

  

P0002

Repatriation of Indian investment abroad in debt securities.

  

P0003

Repatriation of Indian investment abroad in branches

  

P0004

Repatriation of Indian investment abroad in subsidiaries and associates

  

P0005

Repatriation of Indian investment abroad in real estate

  

P0006

Foreign direct investment in India in equity

  

P0007

Foreign direct investment in India in debt securities

  

P0008

Foreign direct investment in India in real estate

  

P0009

Foreign portfolio investment in India in equity shares

  

P0010

Foreign portfolio investment in India in debt securities including debt funds

  

P0011

Repayment of loans extended to Non-Residents

  

P0012

Loans from Non-Residents to India

  

P0014

Receipts o/a Non-Resident deposits (FCNRB/NRERA etc.) ADs should report these even if funds are not 'swapped' into Rupees.

  

P0015

Loans & overdrafts taken by ADs on their own account. (Any amount of loan credited to the NOSTRO account which may not be swapped into Rupees should also be reported)

  

P0016

Purchase of a foreign currency against another currency.

  

P0017

Sale of intangible assets like patents, copyrights, trade marks etc. by Indian companies

  

P0018

Other capital receipts not included elsewhere

01

Exports (of Goods)

P0101

Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)

  

P0102

Realisation of export bills (in respect of goods) sent on collection (full invoice value)

  

P0103

Advance receipts against export contracts (export of goods only)

  

P0104

Receipts against export of goods not covered by the GR/PP/SOFTEX/EC copy of shipping bill etc.

  

P0105

Export bills (in respect of goods) sent on collection.

  

P0106

Conversion of overdue export bills from NPD to collection mode

  

P0107

Realisation of NPD export bills (full value of bill to be reported)

02

Transportation

P0201

Receipts of surplus freight/passenger fare by Indian shipping companies operating abroad

  

P0202

Purchases on account of operating expenses of Foreign shipping companies operating in India

  

P0205

Purchases on account of operational leasing (with crew) – Shipping companies

  

P0207

Receipts of surplus freight/passenger fare by Indian Airlines companies operating abroad.

  

P0208

Receipt on account of operating expenses of Foreign Airlines companies operating in India

  

P0211

Purchases on account of operational leasing (with crew)Airlines companies

  

P0213

Receipts on account of other transportation services (stevedoring, demurrage, port handling charges etc).

03

Travel

P0301

Purchases towards travel (Includes purchases of foreign TCs, currency notes etc over the counter, by hotels, hospitals, Emporiums, Educational institutions etc. as well as amount received by TT/SWIFT transfers or debit to Non-Resident account).

  

P0308

FC surrendered by returning Indian tourists.

04

Communication Service

P0401

Postal services

  

P0402

Courier services

  

P0403

Telecommunication services

  

P0404

Satellite services

05

Construction Service

P0501

Receipts for cost of construction of services projects in India

06

Insurance Service

P0601

Receipts of life insurance premium

  

P0602

Receipts of freight insurance – relating to import & export of goods

  

P0603

Receipts on account of other general insurance premium

  

P0604

Receipts of Reinsurance premium

  

P0605

Receipts on account of Auxiliary services ( commission on insurance)

  

P0606

Receipts on account of settlement of claims

07

Financial Services

P0701

Financial intermediation except investment banking – Bank charges, collection charges, LC charges, cancellation of forward contracts, commission on financial leasing etc.

  

P0702

Investment banking – brokerage, under writing commission etc.

  

P0703

Auxiliary services – charges on operation & regulatory fees, custodial services, depository services etc.

08

Computer & Information Services

P0801

Hardware consultancy

  

P0802

Software implementation (other than those covered in SOFTEX form)

  

P0803

Data base, data processing charges

  

P0804

Repair and maintenance of computer and software

  

P0805

News agency services

  

P0806

Other information services- Subscription to newspapers, periodicals, etc.

09

Royalties & License Fees

P0901

Franchises services – patents,copy rights, trade marks, industrial processes, franchises etc.

  

P0902

Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)

10

Other Business Services

P1001

Merchanting Services – net receipt (from sale and purchase of goods without crossing the border).

  

P1002

Trade related services – Commission on exports/imports.

  

P1003

Operational leasing services (other than financial leasing and without operating crew) including charter hire

  

P1004

Legal services

  

P1005

Accounting, auditing, book keeping and tax consulting services

  

P1006

Business and management consultancy and public relations services

  

P1007

Advertising, trade fair, market research and public opinion polling services

  

P1008

Research & Development services

  

P1009

Architectural, engineering and other technical services

  

P1010

Agricultural, mining and on –site processing services – protection against insects & disease, increasing of harvest yields, forestry services, mining services like analysis of ores etc.

  

P1011

Inward remittance for maintenance of offices in India

  

P1012

Other services not included elsewhere

11

Personal, Cultural & Recreational services

P1101

Audio-visual and related services – services and associated fees related to production of motion pictures, rentals, fees received by actors, directors, producers and fees for distribution rights.

  

P1102

Personal, cultural services such as those related to museums, libraries, archives and sporting activities and fees for correspondence courses of Indian Universities/Institutes

12

Government, not included elsewhere (G.n.i.e.)

P1201

Maintenance of foreign embassies in India

  

P1203

Maintenance of international institutions such as offices of IMF mission, World Bank, UNICEF etc. in India.

13

Transfers

P1301

Inward remittance from Indian non-residents towards family maintenance and savings

  

P1302

Personal gifts and donations

  

P1303

Donations to religious and charitable institutions in India

  

P1304

Grants and donations to governments and charitable institutions established by the governments

  

P1306

Receipts / Refund of taxes

14

Income

P1401

Compensation of employees

  

P1403

Inward remittance towards interest on loans extended to non-residents (ST/MT/LT loans)

  

P1404

Inward remittance of interest on debt securities –debentures / bonds /FRNs etc.

  

P1405

Inward remittance towards interest receipts of ADs on their own account (on investments.)

  

P1406

Repatriation of profits to India

  

P1407

Receipt of dividends by Indians

15

Others

P1501

Refunds / rebates on account of imports

  

P1502

Reversal of wrong entries, refunds of amount remitted for non-imports

  

P1503

Remittances (receipts) by residents under international bidding process.

  

P1590

Receipts below $10,000 (say Rs 5,00,000)

Annexure 3.2

NEW PURPOSE CODES FOR REPORTING FOREX TRANSACTIONS
PAYMENT PURPOSES

Group No.

Purpose Group Name

Purpose Code

Description

00

Capital Account

S0001

Indian investment abroad -in equity capital (shares)

  

S0002

Indian investment abroad -in debt securities

  

S0003

Indian investment abroad -in branches

  

S0004

Indian investment abroad -in subsidiaries and associates

  

S0005

Indian investment abroad -in real estate

  

S0006

Repatriation of Foreign Direct Investment in India- in equity shares

  

S0007

Repatriation of Foreign Direct Investment in India- in debt securities

  

S0008

Repatriation of Foreign Direct Investment in India- in real estate

  

S0009

Repatriation of Foreign Portfolio Investment in India- in equity shares

  

S0010

Repatriation of Foreign Portfolio Investment in India- in debt securities

  

S0011

Loans extended to Non-Residents

  

S0012

Repayment of loans received from Non-Residents (Long & medium term loans)

  

S0013

Repayment of short term loans received from Non-Residents

  

S0014

Repatriation of Non-Resident Deposits (FCNRB/NRERA etc)

  

S0015

Repayment of loans & overdrafts taken by ADs on their own account.

  

S0016

Sale of a foreign currency against another foreign currency

  

S0017

Purchase of intangible assets like patents, copyrights, trade marks etc.

  

S0018

Other capital payments not included elsewhere

01

Imports

S0101

Advance payment against imports

  

S0102

Payment towards imports- settlement of invoice

  

S0103

Imports by diplomatic missions

  

S0104

Intermediary trade

  

S0190

Imports below Rs. 500,000- (For use by ECD offices)

02

Transportation

S0201

Payments for surplus freight/passenger fare by foreign shipping companies operating in India.

  

S0202

Payment for operating expenses of Indian shipping companies operating abroad.

  

S0203

Freight on imports – Shipping companies

  

S0204

Freight on exports – Shipping companies

  

S0205

Operational leasing (with crew) – Shipping companies

  

S0206

Booking of passages abroad – Shipping companies

  

S0207

Payments for surplus freight/passenger fare by foreign Airlines companies operating in India.

  

S0208

Operating expenses of Indian Airlines companies operating abroad

  

S0209

Freight on imports – Airlines companies

  

S0210

Freight on exports – Airlines companies

  

S0211

Operational leasing (with crew) – Airlines companies

  

S0212

Booking of passages abroad – Airlines companies

  

S0213

Payments on account of stevedoring, demurrage, port handling charges etc.

03

Travel

S0301

Remittance towards Business travel.

  

S0302

Travel under basic travel quota (BTQ)

  

S0303

Travel for pilgrimage

  

S0304

Travel for medical treatment

  

S0305

Travel for education (including fees, hostel expenses etc.)

  

S0306

Other travel (international credit cards)

04

Communica-tion Service

S0401

Postal services

  

S0402

Courier services

  

S0403

Telecommunication services

  

S0404

Satellite services

05

Construction Service

S0501

Construction of projects abroad by Indian companies including import of goods at project site

  

S0502

Payments for cost of construction etc. of projects executed by foreign companies in India.

06

Insurance Service

S0601

Payments for Life insurance premium

  

S0602

Freight insurance – relating to import & export of goods

  

S0603

Other general insurance premium

  

S0604

Reinsurance premium

  

S0605

Auxiliary services (commission on insurance)

  

S0606

Settlement of claims

07

Financial Services

S0701

Financial intermediation except investment banking – Bank charges, collection charges, LC charges, cancellation of forward contracts, commission on financial leasing etc.

  

S0702

Investment banking – brokerage, under writing commission etc.

  

S0703

Auxiliary services – charges on operation & regulatory fees, custodial services, depository services etc.

08

Computer & Information Services

S0801

Hardware consultancy

  

S0802

Software implementation (other than those covered in SOFTEX form)

  

S0803

Data base, data processing charges

  

S0804

Repair and maintenance of computer and software

  

S0805

News agency services

  

S0806

Other information services- Subscription to newspapers, periodicals

09

Royalties & License Fees

S0901

Franchises services – patents, copyrights, trade marks, industrial processes, franchises etc.

  

S0902

Payment for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)

10

Other Business Services

S1001

Merchanting services –net payments (from Sale & purchase of goods without crossing the border)

  

S1002

Trade related services – commission on exports / imports

  

S1003

Operational leasing services (other than financial leasing) without operating crew, including charter hire

  

S1004

Legal services

  

S1005

Accounting, auditing, book keeping and tax consulting services

  

S1006

Business and management consultancy and public relations services

  

S1007

Advertising, trade fair, market research and public opinion polling service

  

S1008

Research & Development services

  

S1009

Architectural, engineering and other technical services

  

S1010

Agricultural, mining and on–site processing services – protection against insects & disease, increasing of harvest yields, forestry services, mining services like analysis of ores etc.

  

S1011

Payments for maintenance of offices abroad

  

S1012

Other services not included elsewhere

11

Personal, Cultural & Recreational services

S1101

Audio-visual and related services – services and associated fees related to production of motion pictures, rentals, fees received by actors, directors, producers and fees for distribution rights.

  

S1102

Personal, cultural services such as those related to museums, libraries, archives and sporting activities; fees for correspondence courses abroad.

12

Government not included elsewhere (G.n.i.e.)

S1201

Maintenance of Indian embassies abroad

  

S1202

Remittances by foreign embassies in India

13

Transfers

S1301

Remittance by non-residents towards family maintenance and savings

  

S1302

Remittance towards personal gifts and donations

  

S1303

Remittance towards donations to religious and charitable institutions abroad

  

S1304

Remittance towards grants and donations to other governments and charitable institutions established by the governments.

  

S1305

Contributions/donations by the Government to international institutions

  

S1306

Remittance towards payment / refund of taxes.

14

Income

S1401

Compensation of employees

  

S1402

Remittance towards interest on Non-Resident deposits (FCNRB/NRERA/ NRNRD /NRSR etc.)

  

S1403

Remittance towards interest on loans from Non-Residents (ST/MT/LT loans)

  

S1404

Remittance of interest on debt securities –debentures / bonds /FRNs etc.

  

S1405

Remittance towards interest payment by ADs on their own account (to VOSTRO a/c holders or the OD on NOSTRO a/c.)

  

S1406

Repatriation of profits

  

S1407

Payment / repatriation of dividends

15

Others

S1501

Refunds / rebates / reduction in invoice value on account of exports

  

S1502

Reversal of wrong entries, refunds of amount remitted for non-exports

  

S1503

Payments by residents for international bidding

  

S1590

Outward remittances below Rs500,000- (for use by ECD regional offices)


Annexure 3.4

Summary Distribution of New critical AD Branches - 2000


 

ECD RO

Mumbai

Calcutta

New Delhi

Kanpur

Chennai

Ahmedabad

Bangalore

Kochi

Hyderabad

Jaipur

Chandigarh

Panaji

Patna

Bhopal

Total


1

State Bank of india

13

7

6

3

11

8

8

2

6

 

3

1

1

4

73

                 

2

State Bank Subsidiaries

12

 

10

 

5

4

2

3

4

1

1

  

1

43

                 

3

Bank of India

11

2

1

 

2

2

1

   

2

   

21

                 

4

Bank of Baroda

12

1

1

 

2

5

1

1

1

     

24

                 

5

Canara Bank

8

3

10

1

7

1

5

1

2

 

1

1

  

40

                 

6

Syndicate Bank

3

 

3

   

1

       

7

                 

7

Union Bank

15

1

2

 

1

 

1

2

1

     

23

                 

8

Central Bank of India

6

1

1

 

2

1

 

1

1

     

13

                 

9

Punjab National Bank

7

3

6

1

2

    

1

3

   

23

                 

10

Punjab & Sind Bank

2

 

1

           

3

                 

11

Dena Bank

4

    

3

        

7

                 

12

Bank of Maharashtra

2

 

1

           

3

                 

13

Allahabad Bank

3

2

1

1

1

2

    

1

   

11

                 

14

Corporation Bank

3

1

2

 

2

1

3

 

1

     

13

                 

15

Indian Bank

3

   

4

 

1

2

1

     

11

                 

16

Indian Overseas Bank

4

2

4

1

6

1

1

 

2

     

21

                 

17

Oriental Bk of Commerce

2

1

3

  

1

    

2

   

9

                 

18

Vijaya Bank

2

1

1

   

1

       

5

                 

19

Vysya Bank

3

1

1

   

1

1

      

7

                 

20

Federal Bank

1

1

     

2

      

4

                 

21

UCO Bank

1

1

1

 

1

   

1

     

5

                 

22

Foreign Banks

33

10

16

 

8

2

4

1

1

     

75

                 

23

Other Banks

29

3

10

 

5

2

3

4

1

2

    

59

                 
 

Total

179

41

81

7

59

33

33

20

22

4

13

2

1

5

500

 

Total excluding SBI

166

34

75

4

48

25

25

18

16

4

10

1

0

1

427


Chapter 4 : Summary and Recommendations

4.1 The Reserve Bank of India (RBI) has primary responsibility of compilation and dissemination of balance of payments (BoP) statistics. The foreign exchange transactions reported through R-returns by authorised dealers (ADs) essentially form the basis of compilation of BoP statistics which are disseminated on a quarterly basis with a lag of a quarter. The conceptual framework of compilation of the BoP is consistent with the standard set out in the 5th Edition of the International Monetary Fund (IMF) Balance of Payments Manual (BPM5). During the recent period, however, there has been pressing demand for disaggregated data on the services component of the BoP from international agencies as also from the standpoint of our trade negotiations with the World Trade Organisation (WTO). (Para 1.1)

4.2 Recently, a Manual on Statistics of International Trade in Services (MSITS) has been prepared by the Task Force on Statistics of International Trade in Services. The Extended Balance of Payments Services (EBOPS) classification of transactions between residents and non-residents recommended in MSITS provides information required by the WTO in connection with the GATS agreement. The principal aim of the manual is to meet user needs and to facilitate evaluation of market access opportunities and the assessment of the extent of opening up achieved in specific services and markets. (Para 2.2)

4.3 The Group examined all the components proposed under EBOPS for their relevance. The Group is of the view that while disaggregated information under most of the component would be useful, data on certain components such as space transport, rail transport and inland waterway transport may become relevant in the Indian context at a later date when negotiations on multi-modal transport take place. The Group, therefore, recommends that the EBOPS components may be adopted with suitable modifications to capture the important items in India’s international transactions in services. (Para 2.4)

4.4 Analysis of the international best practices indicates that most of the countries rely upon well-designed and periodical surveys to garner information on trade in services. In this regard, the Group recommends that identification of associations, bodies and forums of business, professional and technical services (such as legal, accounting, management, advertising, market research, architectural, engineering, mining, agricultural services etc.) for collecting information on the receipts on account of export of various items of services would be desirable to supplement the data obtained through banking source. (Paras 2.7 & 2.8)

4.5 The Group reviewed the extant compilation procedure of BoP statistics in India with an emphasis on disaggregated data on international trade in services. The classification of India’s BoP statistics into various accounts and components is done with the help of purpose-wise disaggregated data reported by the critical Authorised Dealers (ADs), essentially banks, through floppy media. (Para 3.1)

4.6 The Group noted that the floppy based data reporting mechanism has worked satisfactorily and has resulted in considerable reduction in time lag in reporting of BoP data. The Group, therefore, proposes that the floppy based reporting mechanism may be continued with revision of purpose codes to capture disaggregated items of data required for EBOPS. (Para 3.3)

4.7 The international practices with regard to recording BoP data indicate that most of the countries use a combination of the foreign exchange transactions reported through banking channel and surveys/census to gather the necessary details. The Group feels that as exchange regulations are relaxed over time, it would be increasingly difficult to obtain various disaggregated information from banking channel. Hence, greater reliance would have to be placed on surveys for obtaining various details. The Group recommends that while the present practice of reliance on bank data and surveys may continue, it would be desirable to strengthen both the channels. (Paras 3.5 & 3.6)

4.8 The Group noted that the quality of reporting suffers because of large number of small transactions as evident from the past experience. The Group, therefore, is of the view that there is a need for periodic review of the cut-off limit. While this process would reduce the reporting burden on the banks, it would enhance the quality of reporting. (Para 3.8)

4.9 The Group noted that the cut-off limit has already been raised to US $ 10,000 (about Rs. 4.9 lakh at current exchange rates) effective January 2001. The Group is of the view that since the ADs would have to report the value of transactions in Rupees, the prescription of a cut-off limit in US dollar terms may give rise to ambiguities in terms of cross-currency transaction of value. The Group, therefore, recommends that for the purpose of data reporting the cut-off limit may be placed at Rs.5,00,000 which is slightly higher than US$ 10,000 at the current exchange rate. The Group recommends that the RBI should change the survey design to capture purpose/country-wise information for receipts up to Rs.5,00,000 from a representative sample of critical AD branches. (Para 3.9 & 3.10)

4.10 The Group feels that keeping in view the dynamic nature of trade in services, the coding system should have the desired flexibility to easily accommodate changes from time to time in the ‘purpose’ list. The Group, therefore, recommends a four-digit coding system with the first two digits representing the main components and the last two digits indicating further disaggregation of the main components. Keeping in view the requirements of EBOPS and the format of the extant reporting mechanism, the Group recommends that disaggregated data may be collected under 15 major purpose groups. The Group proposes introduction of additional codes for reporting of inter-bank transaction and ADs’ transactions with the RBI (to be entered as a single-entry in a fortnight) to facilitate periodic validation of the data. (Paras 3.13 & 3.14)

4.11 At the disaggregated level, the Group proposes increase in the number of purpose codes for purchases from 58 to 86 and for sale from 64 to 98. While the number of codes would increase by 62, the Group feels that the reporting burden on the ADs would not increase as the ADs would be required to provide regular disaggregated data for less number of transactions with the increase in the cut-off limit to Rs.5,00,000. (Para 3.15)

4.13 The Group recommends that for the purpose of the survey of ‘unclassified receipts’, the selection of critical branches may be based on reporting of non-export receipts of at least Rs.5 crores in a year. Sample of branches may be drawn separately for 'Foreign Currency Receipts' and 'Rupee Receipts' as the coverage of purposes under these two categories could be significantly different. These selected AD branches may report purpose-wise details of receipts under Rs.5,00,000 for two days in a fortnight instead of four days as is the current practice for the extant survey. (Para 3.16)

4.14 In view of the revision of the purpose code, the Group also undertook the exercise of revising the form A2. Notwithstanding the proposed increase in the number of codes from 64 to 98, the Group is of the view that the contents of the form A2 should be confined to a single sheet for the convenience of the recording of the information. (Para 3.17)

4.15 The Group is of the opinion that the new reporting mechanism could be facilitated by giving wider publicity so as to sensitise the officials in AD branches working at the operational level. The Group, therefore, feels that the report of the Group should be published and placed on the RBI website. (Para 3.18)

4.16 The Group is of the view that apart from the wide publicity given to the need for detailed statistics on trade in services, the quality of reporting of data would depend significantly on structured training given to the concerned officials of the ADs, who would be operating the software at the branch level or would be training such officials in their respective banks. For the purpose of training, the Group identified 500 critical AD branches on the basis of volume of transactions as at the end of March 2000. For this purpose the RBI may design an appropriate training programme which could be of duration of two days. (Para 3.19)

4.17 The Group recommends that while the present floppy based reporting mechanism may continue, the critical ADs should be encouraged to report data through e-mail to the RBI to further reduce the time lag of reporting. The Group feels that the AD branches which have become ‘non-critical’ should be encouraged to continue the reporting of foreign exchange transactions through floppy media. The Group also recommends that the RBI should consider extending the floppy based reporting system to non-critical AD branches. (Para 3.21)

 
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