The Reserve Bank has postponed the adoption of the Indian Accounting Standards (Ind AS) for commercial banks by one year as many banks are not prepared to migrate to the new accounting system. The earlier deadline for banks to switch to the Ind AS was from April 1 2018.
Reason
The format of the financial statements as prescribed in the Third Schedule of the Banking Regulation Act which is not amenable for reporting financial statements under Ind AS, and, therefore, RBI has requested the government to amend the Schedule. RBI will continue to have the proforma of financial statements from banks to monitor the progress lenders are making towards migration to Ind-AS.Background
Presently, banks and non-banking financial companies currently follow generally accepted accounting principles (GAAP) standards. According to a February 2016 RBI circular, commercial banks, barring regional rural banks, had to implement the new accounting standards from April 1.A key change under the new rules was the need to provision for accounts based on expected loss, instead of when an account turns into a non-performing asset (NPA).
What is Ind As?
Ind AS is global accounting practice on par with International Financial Reporting Standard (IFRS) 9. It governs the 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.
The Ministry of Corporate Affairs (MCA) on 16 February 2015 notified 39 accounting standards and laid down an Indian Accounting Standards (Ind AS) transition roadmap for companies. In January 2016, the MCA finally announced Ind AS roadmap for scheduled commercial banks (excluding regional rural banks [RRBs]), insurers/insurance companies and NBFCs.
The Reserve Bank has postponed the implementation of the Indian Accounting Standards (Ind AS) for commercial banks by
a. 1s April 2020
b. 1st April 2019
c. 30th April 2019
d. 30th April 2020
Which of the following is/are barred from adopting Indian Accounting Standards (Ind AS)?
a. Regional Rural Banks
b. Non-Banking Finance Companies
c. Payment Banks
d. all of the above
e. only a
