The Central Government and the Reserve Bank of India (RBI) may postpone the implementation of Indian Accounting Standards (IndAS) meant for banks considering the legislative changes and additional capital requirements the process would entail, said officials.
Banks and Non-banking Financial Companies (NBFCs) are directed to switch to the newly applicable Indian Accounting Standards (IndAS) from 1 April 2018. As of now, they adhere to Indian generally accepted accounting principles (GAAP) standards. Other corporate entities began following the IndAS with effect from 1 April 2016.
“There is a requirement to amend the Banking Regulation Act before the implementation of IndAS for public sector banks. The schedule in BR Act pertaining to the financial statement disclosures required to be changed to the IndAS format,” said an official.
Section 29 of the BR Act focuses on the accounts and balance sheets of public sector banks. Private sector banks are scaled under the Companies Act, which is based on the new accounting standards.
The RBI is yet to issue any operational guidelines for the implementation of the new accounting standards in wake of the delay in the amendment in the BR Act.