The Reserve Bank of India (RBI) has said that compliance with accounting standards (AS) pertaining to segment reporting, related party disclosure, consolidated financial statements, and taxes on income will be optional for all scheduled commercial banks only for the financial year ended March 31, 2002.
The step comes in the wake of banks expressing difficulties in complying with these accounting standards.
Banks are facing problems due to the absence of uniform disclosure formats and appropriate management information systems to support the comprehensive disclosures.
The RBI pointed out that banks would be required to conform to the accounting standards by 31st March, 2003 in accordance with the detailed guidelines that will be issued shortly on the basis of the recommendations of the Working Group.
In accordance with the announcement made in the Mid-Term Review of Monetary and Credit Policy for the year 2001-2002 in October 2001, the RBI has set up a Working Group under the chairmanship of N D Gupta, the then president of the ICAI (Institute of Chartered Accountants of India), with representatives, inter alia, of the Indian Banks Association (IBA), banks and RBI to identify compliance with accounting standards issued by the ICAI and recommend steps to eliminate/reduce the gaps.
The difficulties expressed by the banks are being discussed in detail in the meetings of the above Working Group, which is expected to submit its recommendations shortly.
