State Bank of India (SBI) has shortlisted PricewaterhouseCoopers (PwC) for across-the-board implementation of US GAAP (Generally Accepted Accounting Practices) norms.
The bank's deputy general manager (GAAP), Anup Chakroborty, said: "The bank has shortlisted PricewaterhouseCoopers and the decision would be placed before the board for approval at its next meeting during the end of this month."
On the PwC's side, the matter is being handled by the head of the relevant business, Kersi Vacha, while Sanjay Hegde is in-charge of implementation of GAAP. Hegde said, "We are yet to be informed officially of the decision."
Even the associate banks of the SBI have to follow a uniform accounting system as US GAAP pre-supposes consolidation of group accounts.
SBI has its US GAAP team in place and plans are there to have the accounting norms working at the bank in about two years. Initially, this will be in the form of a desktop reconciliation that will require three to four months.
This will then be extended to the balance sheet of the current and the next financial years. In fact, with the help of PwC, the bank will have its accounts upgraded to international standards by 2003.
Earlier, the bank has asked different accounting firms to quote for the implementation exercise. Sources said there were seven firms in the race including two Indian firms.
Aurthur Andersen, Ernst & Young, KPMG, Deloitte & Touche and PwC were among the larger accounting firms that were in the race. PwC is understood have quoted around Rs 18 crore as fees for the purpose.
US GAAP is required in case the bank wants to issue any American depositary receipt or global depository receipt. Although no such plans from the bank seem imminent, it would like to implement the norms to increase its global acceptance, internationalise operations and receive general acceptance as global bank.
The bank is laying major thrust on international operations and globalisation. To this effect, the US GAAP accounting standards will enable SBI to take part in overseas tenders, euro tenders and foreign currency dealing in a better way.
With the Indian accounting standards vastly varying from the international ones, SBI is facing difficulty in participating in global deals.
Further, the bank to gain widespread acceptance as a bank in the international market. SBI felt that several overseas business deals were being pocketed by weaker foreign banks as they follow the globally-accepted accounting norms.
Implementation of US GAAP will help the bank in gaining acceptance in the international market and make it a serious player in cross-border deals.
