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India’s financial and accounting regulators are to meet here on Friday to decide on the critical issue of whether or not to provide a breather for NBFCs with regard to the implementation of Ind AS accounting standards.
The Finance Industry Development Council — a representative body of asset-financing NBFCs — had pitched for a one-year deferment of Ind AS implementation, on the lines of recent provision for commercial banks.
The meeting, which will be held under the aegis of the MCA-appointed core group, will see participation from financial sector regulators RBI, SEBI, IRDA, PFRDA and National Housing Bank, official sources said.
MCA Secretary Injeti Srinivas will chair this meeting, which is also expected to be attended by representatives of the CAG, Department of Economic Affairs, Department of Financial Services and the CA Institute, besides Chairman of National Advisory Committee on Accounting Standards (NACAS). Industry and trade associations are also to attend this meeting.
This issue has turned somewhat controversial given that financial sector regulators are not on the same page as far as treating NBFCs on the lines of banks for the issue of implementation of Ind AS. While some of the regulators are keen that NBFCs should not get the deferment, there are some who want NBFCs to be allowed to defer the implementation, sources close to the development said.
NACAS view
NACAS Chairman Amarjit Chopra said that the committee is not in favour of allowing NBFCs to defer the implementation of Ind AS accounting standards. “It is for the government to decide. But the NACAS view is there is no case for extending the deferment to NBFCs. Even the Accounting Standards Board of the CA Institute has recommended that there should be no extension for NBFCs,” Chopra told BusinessLine here.
“They (NBFCs) are trying to equate themselves with banks. That cannot be done. They had three years time to prepare. Why didn’t they prepare?. NBFCs were not raising any issue till the RBI postponed it for banks. For banks, the situation is different,” he said.
It may be recalled that the Reserve Bank of India had, in its April monetary policy statement, deferred the implementation of Indian Accounting Standards, popularly known as Ind AS, by one year, in respect of scheduled commercial banks.
While banks got this relief, there was no word about NBFCs.
Ind AS is a set of accounting norms developed by Indian authorities, which converge with the International Financial Reporting Standards.
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