Question

Write down the structure of capital account

Answer 1

Capital account consists of three components

1. Private Capital
2. Banking Capital
3. Official Capital

1. Private Capital: Private capital consists of foreign investments, long-term loans and foreign currency deposits.
2. Banking Capital: Banking capital includes movement into external financial assets and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.
3. Official Capital: It includes RBI’s holdings of foreign currency and special drawing rights (SDR) held by the Government.