TNPSC Thervupettagam

RBI defers Indian Accounting Standards (Ind AS)

March 24 , 2019 2101 days 867 0
  • The Reserve Bank of India (RBI) has deferred the implementation of new accounting rules, Indian Accounting Standards (Ind AS) for banks till further notice.
  • RBI has delayed the introduction of these tough new accounting rules for the second time.
  • If these accounting standards come into effect immediately India’s state-run banks would have had to increase provisions by as much as 1.1 trillion rupees ($16 billion) in the fiscal first quarter ending June 30.
  • This will be a huge burden for the banks which already struggle with large quantum of bad loans.
  • The new accounting standards would require banks to make ‘provisions’ immediately when they judge that a loan is likely to default, rather than waiting for the borrower to start missing payments.
  • Urban Cooperative Banks (UCBs) and Regional Rural Banks (RRBs) shall not be required to apply Ind AS and shall continue to comply with the existing Accounting Standards.

Indian Accounting Standards

  • Indian Accounting Standards (Ind AS) is a new set of accounting norms which converge with the International Financial Reporting Standards (IFRS).
  • IFRS 9 accounting standard was developed in the aftermath of 2008 Financial crisis to prevent collapse of banks.

Leave a Reply

Your Comment is awaiting moderation.

Your email address will not be published. Required fields are marked *

Categories