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The Reserve Bank of India issues regulatory guidance on Ind AS for NBFCs and ARCs

The Reserve Bank of India issues regulatory guidance

Large Non-Banking Financial Companies (NBFCs) and Asset Reconstruction Companies (ARCs) reported their first Ind AS financial statements for the financial year ended 31 March 2019.

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Background

Large Non-Banking Financial Companies (NBFCs) and Asset Reconstruction Companies (ARCs) reported their first Ind AS financial statements for the financial year ended 31 March 2019. The Ind AS implementation has affected various regulatory provisions applicable to NBFCs and ARCs. Therefore, the Reserve Bank of India (RBI) expects a high quality implementation of Ind AS which requires detailed analysis and application of judgement and detailed documentation to support judgements. 

New development

Considering the impact of Ind AS on the regulatory provisions, on 13 March 2020, RBI issued a notification providing regulatory guidance on Ind AS (RBI guidelines). These guidelines aim to promote high quality and consistent implementation of Ind AS (pertaining to specific prudential aspects), and to facilitate comparison and better supervision. The RBI guidelines are applicable to NBFCs and ARCs for preparing their financial statements for financial years 2019-20 and onwards.

This issue of First Notes aim to provide an overview of the RBI guidelines

To access the text of the RBI circular, please click here.

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