RBI, govt may extend deadline for banks to switch to IndAS
The Reserve Bank of India (RBI) could give banks more time to implement new accounting standards because the process contains legislative changes and additional capital, according to a Mint report.
Banks and financial companies are expected to implement Indian Accounting Standards (IndAS) from April 1, 2018. At present, they follow Indian Generally Accepted Accounting Principles (GAAP) standards.
The RBI has so far not issued any guidelines for public sector banks because it requires amendments to the Banking Regulations Act. Private sector banks are covered under the Companies Act. Corporate entities have been following IndAS from April 2016.
“The implementation of IndAS for public sector banks requires an amendment to the Banking Regulation Act. The schedule in BR Act relating to financial statement disclosures needs to be changed to the IndAS format,” a senior RBI official told Mint.
The report says that the RBI and the finance ministry have declined to comment on the matter.
IndAS guidelines have been framed according to International Financial Reporting Standards (IFRS). Implenetation of the new accounting standards is likely to impact bad-loan provisions for banks.
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