Providing a much needed relief to both public and private sector banks in India, the Reserve Bank of India (RBI) has decided to defer implementation of Indian Accounting Standards
The set of rules, popularly known as Ind AS, by one year, in respect of scheduled commercial banks is a set of accounting norms developed by Indian authorities, which converge with the International Financial Reporting Standards (IFRS).
Speaking on the relief, several accounting experts have noted that the deferment could offer the necessary time for banks and give them more time to move to global practices such as expected credit-loss model, it would certainly reduce the comparability of Indian banks’ performance vis-à-vis global peers, said accounting experts.
It should be noted that as per the Centre’s roadmap for adoption of Ind AS in the financial sector, all scheduled commercial banks (excluding regional rural banks) were earlier required to prepare Ind AS-based financial statements for accounting periods beginning April 1, 2018. This was to be done with comparatives ending March 31, 2018, or thereafter.
In a statement the RBI said that necessary legislative amendments – to make the format of financial statements, prescribed in the Third Schedule to the Banking Regulation Act, 1949, compatible with accounts under Ind AS – are still under consideration.