New Accounts Standards For Nbfcs By Jan 1999

New accounting and disclosure standards drafted by the Reserve Bank of India (RBI) and the Institute of Chartered Accountants of India (ICAI) joint working group for the non-banking finance companies may come into effect from January 1, 1999.

Industry sources said the new format might come into effect from that date after the working group finalised the new format and the RBI accepted it.

The joint working group has circulated a draft of the new format to various NBFC associations, which according to sources, called for enhanced disclosures compared with those made by commercial banks, and has asked for comments on the draft from the industry by July 31 next.

Reserve Bank of India governor C Rangarajan, at a recent internal conference, had said as the present balance sheets and the profit and loss accounts of non-banking finance comapnies did not indicate the true health of the non-banking finance companies, the RBI-ICAI working group would devise a format of report, on the pattern of the long form of audit reports in the case of banks.

Industry experts have said the draft emphasised on uniformity and consistency in disclosures made by non-banking finance companies.

Under the present circumstances, there were two to three different formats of financial disclosures, which virtually made it impossible to compare two finance companies.