Reference : Reserve Bank of India
Update:
Implementation of Indian Accounting Standards
RBI framed regulatory guidance on Ind AS in order to promote a high quality and consistent implementation as well as facilitate comparison and better supervision. These guidelines focus on the need to ensure consistency in the application of the accounting standards.
A. Governance Framework
- NBFCs/ARCs are advised to put in place Board approved policies that clearly articulate and document their business models and portfolios and shall articulate the objectives for managing each portfolio.
- NBFCs/ARCs shall frame their policy for sales out of amortised cost business model portfolios and disclose the same.
- NBFCs/ARCs are advised to not make changes in the parameters, assumptions and other aspects of their ECL model for the purposes of profit smoothening.
- The ACB should approve the classification of accounts that are past due beyond 90 days but not treated as impaired, with the rationale for the same clearly documented.
- NBFCs/ARCs shall not defer the recognition of significant increase in credit risk for any exposure that is overdue beyond 60 days.
B. Prudential Floor for ECL
- NBFCs/ARCs shall also maintain the asset classification and compute provisions as per extant prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP) including borrower/beneficiary wise classification, provisioning for standard as well as restructured assets, NPA ageing, etc.
- NBFCs/ARCs shall appropriate the difference from their net profit or loss after tax to a separate ‘Impairment Reserve’.
C. Computation of Regulatory Capital and Regulatory Ratios
- Any net unrealised gains arising on fair valuation of financial instruments, including such gains arising on transition to Ind AS, should not be included in owned funds whereas all such net losses should be considered.
- NBFCs shall reduce the lower of acquisition cost or fair value of investments/advances in subsidiaries/other group companies and other NBFCs while determining Tier I capital as prescribed in the notification.
- The NBFC shall reduce 50 per cent of the amount of credit enhancement given from Tier I capital and the balance from Tier II capital.
Implication:
NBFCs are required to comply with Indian Accounting Standards for the preparation of their financial statements.
Update:
Limits on exposure to single and group borrowers/parties and large exposures and Revision in the target for priority sector lending – UCBs
The prudential exposure limits for UCBs for a single borrower/party and a group of connected borrowers/parties shall be 15 per cent and 25 per cent, respectively, of their tier-I capital. The revised exposure limits shall apply to all types of fresh exposures taken by UCBs. UCBs shall have at least 50 per cent of their aggregate loans and advances comprising loans of not more than ₹25 lakh or 0.2% of their tier I capital, whichever is higher, subject to a maximum of Rs.1 crore, per borrower/party. the overall PSL target for UCBs shall stand increased to 75 per cent of ANBC or CEOBSE, whichever is higher.
Implication:
UCBs shall comply with the above target by March 31, 2024.
Reference: Central Board of Indirect Taxes & Customs
Update:
Forms available on GST portal for Taxpayers and Tax Officials
CBIC issued various forms for GST related companies to be made by taxpayers and for taking actions on them by tax officials
Reference: Ministry of Corporate Affairs
Update:
Invitation for Public Comments on the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020
A draft of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020 has been made for carrying out amendments in the Companies (CSR Policy) Rules, 2014 and public comments for the same are solicited.
Implication:
Stakeholders may submit their comments, if any by the end of business hours on 2th March, 2020 positively.
KNOWLEDGE ALERT
Insights to help you sharpen your Governance, Risk and Compliance Knowledge
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