Non-banking finance companies (NBFCs) have knocked RBI’s door seeking deferment of implementation of Ind AS accounting standards by a year, on the lines recently allowed for commercial banks.
“We have approached RBI seeking a similar deferment as recently allowed to banks,” Raman Aggarwal, Chairman, Finance Industry Development Council (FIDC), told BusinessLine .
There is no reason why NBFCs should not get a similar dispensation as commercial banks on this count, said Aggarwal.
FIDC is a self-regulatory body representing the interests of the asset financing NBFCs.
In the recently announced monetary policy statement, the RBI had deferred 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.
Aggarwal said there is now considerable uncertainty among NBFCs that they may be asked to prepare their accounts as per Ind AS, although there is still lack of clarity on several issues.
Ind AS is a set of accounting norms developed by Indian authorities, which converge with the International Financial Reporting Standards.
Dual regulation?
Currently, NBFCs are under the sole jurisdiction of RBI. The Corporate Affairs Ministry in its Ind AS-related notification did not exclude (like banks) the NBFCs from its purview of mandating Ind AS.
This has raised fears of “dual regulations” among NBFCs. The FIDC has urged RBI to point out to the MCA the need to vest the relevant powers to the central bank in the case of NBFCs too, as was done in the case of commercial banks.
“Otherwise. it could become a case of dual regulation,” the FIDC said in a letter to RBI.