A final decision on the timeline to implement the Ind-AS accounting rules across the Indian banking sector is yet to be taken, RBI Deputy Governor NS Vishwanathan said on an analyst call following the monetary policy announcement yesterday. Two analysts who attended the call confirmed this. The call is closed to the media.
In response to a query on the timeline for implementation, Vishwanathan said that while banks should be prepared, there is no final decision yet.
In a February 2016 circular, the RBI had said that banks should start complying with Ind-AS starting the accounting period beginning from April 1, 2018. A key change under the new rules is the need to provision for accounts based on expected loss rather than only when an account turns into a non performing asset.
According to an India Ratings study released in January, scheduled commercial banks may need up to Rs 89,000 crore towards incremental provisioning for advances while transiting to the Ind-AS regime. Of this, public sector banks would need Rs 63,100 crore and private sector banks would need upto Rs 25,800 crore.
Also Read: Scheduled Commercial Banks May Need Rs 89,000 Crore Provisioning Under Ind-AS
Bankers, however, have indicated that there will be adequate time given to make the transition. State Bank of India chairman Rajnish Kumar told BloombergQuint in January that banks expect to get 4-5 years to meet the additional requirements for the purpose of maintaining capital adequacy ratios. He was speaking on the sidelines of the World Economic Forum in Davos.
RBI did not immediately respond to an email from BloombergQuint.
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