The Reserve Bank of India (RBI) has deferred the implementation of new accounting rules, Indian Accounting Standards (Ind AS) for banks till further notice. This is the second extension provided by the RBI. Earlier in April 2018, RBI had postponed the implementation of Ind AS by the banks by one year.
Earlier in April 2018, RBI had postponed implementation of Ind AS by the banks by one year, citing need for legal changes and more preparatory work by country’s banks. RBI has requested Union Government to amend Banking Regulation Act, 1949 to implement the new Ind AS. The amendments were needed as format of current financial statements as prescribed under Schedule 3 of this Act is not amenable to reporting financial statements under Ind-AS.
Ind AS is global accounting practice based on the IFRS9 (International Financial Reporting Standard IFRS9) standards created in the aftermath of the financial crisis. It governs accounting and recording of financial transactions as well as presentation of statements such as profit and loss account and balance sheet of lender or a company.
Corporate entities started complying with IndAS with effect from April 2016. Whereas, commercial banks, barring regional rural banks were mandated by RBI in February 2016 to implement Ind AS from April 1, 2018. However, banks and non-banking financial companies (NBFCs) are still following earlier generally accepted accounting principles (GAAP) standards.