RBI/DBR/2015-16/26
Master Direction DBR.FID.No.108/01.02.000/2015-16
June
23, 2016
Master
Direction - Reserve Bank of India (Financial Statements of All India
Financial
Institutions - Presentation, Disclosure and Reporting) Directions, 2016
In exercise of the powers
conferred by Section 45 L of the Reserve Bank of India Act, 1934, the Reserve
Bank of India being satisfied that it is necessary and expedient in the
public interest and in the interest of financial sector policy so to do,
hereby, issues the Directions hereinafter specified.
CHAPTER
– I
PRELIMINARY
1. Short Title and Commencement
(a) These Directions shall be
called the Reserve Bank of India (Financial Statements of All India
Financial Institutions - Presentation, Disclosures and Reporting)
Directions, 2016.
(b) These Directions shall come
into effect on the day these are placed on the official website of the
Reserve Bank of India.
2. Applicability
These Directions shall be
applicable to the All India Financial Institutions (AIFIs) regulated by
Reserve Bank of India viz. EXIM Bank, NABARD, NHB and SIDBI with effect
from the quarter ended December 2016
CHAPTER
– II
FORMAT OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT
AND PREPARATION OF CONSOLIDATED FINACIAL STATEMENTS
3. The AIFIs shall, in respect
of all business transacted by them, prepare a balance-sheet and profit and
loss account as on the last working day of the year or the period, as the
case may be, in the form and manner prescribed under the respective Acts
governing their functioning.
4. In addition to solo level
financial statements, the AIFIs shall also prepare and disclose
Consolidated Financial Statements.
5. The Consolidated Financial
Statements shall be prepared in terms of Accounting Standard (AS) 21
–Consolidated Financial Statements (CFS) and other related accounting
standards – AS 23- Accounting for Investments in Associates in Consolidated
Financial Statements and AS 27- Financial Reporting of Interests in Joint
Ventures. For the purpose, the terms 'parent', 'subsidiary', ‘associate’,
‘joint venture’, 'control' and 'group' shall have the same meaning as
ascribed to them in the above accounting standards.
6. A parent AIFI presenting CFS
shall consolidate all subsidiaries - domestic as well as foreign, except
those specifically permitted to be excluded under AS 21. The reasons for
not consolidating a subsidiary shall be disclosed in CFS. The
responsibility of determining whether a particular entity shall be included
or not for consolidation would be that of the Management of the parent
entity and the Statutory Auditors shall comment in this regard if they are
of the opinion that an entity which ought to have been consolidated had
been omitted.
7. CFS shall normally include
consolidated balance sheet, consolidated statement of profit and loss,
principal accounting policies and notes to accounts.
8. The financial statements used
in the consolidation shall be drawn up as of the same reporting date. If
that is not possible, AS 21 allows adoption of six month old balance sheet
of subsidiaries and prescribes that adjustments shall be made for the
effects of significant transactions or other events that have occurred
during the intervening period. In case that the balance sheet dates of
parent and subsidiaries are different, inter-group netting shall be done as
on the balance sheet date of the parent entity. In the cases where the
balance sheet date coincides with that of the AIFI, the AIFI shall publish
its CFS without waiting for the audit of their subsidiaries by the
Comptroller and Auditor General. However, the AIFI shall ensure completion
of statutory audit of the accounts of such subsidiaries before
consolidation with the parent’s accounts.
9. The CFS shall be prepared
using uniform accounting policies for like transactions and other events in
similar circumstances. If it is not practicable to do so, that fact shall
be disclosed together with the proportions of the items in the consolidated
financial statements to which the different accounting policies have been
applied. For the purpose of preparing the CFS using uniform accounting
policies, the AIFIs shall rely on a Statement of Adjustments for
non-uniform accounting policies, furnished by the Statutory Auditors of the
subsidiaries.
10. In cases where different
entities in a group are governed by different accounting norms laid down by
the concerned regulator for different businesses, the AIFI shall use for
consolidation purposes the rules and regulatory requirements applicable to
the AIFIs in respect of like transactions and other events in similar
circumstances. In situations where regulatory norms have been prescribed by
RBI, the norms as applicable according to the accounting standards may be
followed.
11. For the purpose of
valuation, the investments in associates (other than those specifically
excluded under AS 23) shall be accounted for under the "Equity
Method" of accounting in accordance with AS 23.
12. The valuation of investments
in subsidiaries which are not consolidated and associates which are
excluded under AS 23, shall be as per the relevant valuation norms issued
by the Reserve Bank of India. The valuation of investments in joint
ventures shall be accounted for under the ‘proportionate consolidation’
method as per AS 27. The AIFIs may take into account the provisions of the
accounting standards relating to the exclusion of subsidiaries, associates
or joint ventures from consolidation under specific circumstances.
13. The solo level financial
statements and the CFS shall be submitted to the Department of Banking
Supervision, Reserve Bank of India within one month from the publication of
the AIFI’s annual accounts.
CHAPTER
– III
DISCLOSURE IN FINANCIAL STATEMENTS – NOTES TO ACCOUNTS
14. The AIFIs shall disclose the
information specified in Annexure I of
these Directions in the notes to accounts of the financial statements.
These disclosures are intended only to supplement and not to replace the
disclosure requirements under other laws, regulations or accounting and
financial reporting standards. The disclosures set out in this Direction
constitute only minima and if the AIFIs are encouraged to make additional
disclosures as considered appropriate having regard to their specific operations.
15. The AIFIs shall follow the
guidance on specific issues with respect to certain Accounting Standards as
given in Annex II.
CHAPTER
– IV
CONSOLIDATED PRUDENTIAL REPORTING REQUIREMENTS
Scope
16. Wherever an AIFI has any
subsidiaries, joint ventures or associates, in addition to the CFS, it
shall also prepare Consolidated Prudential Reports (CPRs) as prescribed in Annex III relating to the entre group
including all entities under its control. The AIFIs shall follow the
guidance contained in Annex IV while
preparing these reports. The CPR for a consolidated AIFI shall include
information and accounts of related entities (subsidiaries, associates and
joint ventures) of the AIFI, which carry on activities of financial nature.
The AIFIs shall justify the exclusion of any entity for the purpose of CPR.
Frequency
17. The CPR shall be submitted
on half-yearly basis as part of off-site reporting system on the lines of
the existing DSB returns for the solo entities. The CPR for half-year ended
March shall be submitted by the end of June. If audited results of entities
under the CPR are not available, the AIFIs shall submit the provisional CPR
with unaudited results of such entities, by end of June and final position
by end of September. The CPR for the half-year ended September must be
submitted by the end of December.
Format
18. The AIFIs shall use the same
format for CPRs purposes as their solo balance sheet prescribed under the
respective Acts with appropriate modifications/ notes. The CPR comprises of
Consolidated Balance Sheet, Consolidated Profit & Loss Account, and
select data on financial / risk profile of the consolidated AIFI.
Other consolidation instructions
19. In respect of related
entities which operate under severe long term restrictions which
significantly impair their ability to transfer funds to the parent, the
AIFIs shall disclose separately the book value of the amounts due from such
related entities and the net amounts recoverable from them. The AIFIs shall
also consider making appropriate provisions for the shortfall.
CHAPTER
– V
REPEAL AND OTHER PROVISIONS
Repeal and saving
20. With the issue of these
directions, the instructions / guidelines contained in the circulars issued
by the Reserve Bank listed in Annexure V stand
repealed. All the instructions / guidelines given under the above circulars
shall be deemed as given under these directions. Any reference in other
Circulars / Guidelines /Notifications issued by the Bank containing
reference to the said repealed Circulars, shall mean reference to these
Directions, namely, Financial Statements – Presentation & Disclosures:
Directions, 2016, after the date of repeal. Notwithstanding such repeal,
any action taken, purported to have been taken or initiated under the Circulars
hereby repealed shall continue to be governed by the provisions of the said
Circulars.
Application of other laws not
barred
21. The provisions of these
Directions shall be in addition to, and not in derogation of the provisions
of any other laws, rules, regulations or directions, for the time being in
force.
Interpretations
22. For the purpose of giving
effect to the provisions of these Directions or in order to remove any
difficulties in the application or interpretation of the provisions of
these Directions, the Reserve Bank of India may, if it considers necessary,
issue necessary clarifications in respect of any matter covered herein and
the interpretation of any provision of these directions given by the
Reserve Bank of India shall be final and binding.
Annex
V
List
of Circulars repealed by these directions [to the extent of applicability
to the
AIFIs (EXIM Bank, NABARD, NHB & SIDBI)]
No
|
Circular
No.
|
Date
|
Subject
|
1.
|
DBS.FID.No.20/02.01.00/1997-98
|
04.12.1997
|
Limits on Credit Exposures of
Term Lending Financial Institutions to Individual / Group Borrowers
|
2.
|
MPD.BC.187/07.01.279/1999-2000
|
07.07.1999
|
Forward Rate Agreements /
Interest Rate Swaps
|
3.
|
DBS.FID.No.C-9/01.02.00/2000-01
|
09.11.2000
|
Guidelines - Classification
and Valuation of Investments
|
4.
|
DBS.FID.No.C-19/01.02.00/2000-01
|
28.03.2001
|
Treatment of Restructured
Accounts
|
5.
|
DBS.FID.No.C-26/01.02.00/2000-01
|
20.06.2001
|
Monetary and Credit Policy
Measures 2001-2002 - Credit Exposure Norms
|
6.
|
DBS.FID.No.C-2/01.11.00/2001-02
|
25.08.2001
|
Corporate Debt Restructuring
(CDR)
|
7.
|
DBS.FID.No.C-6/01.02.00/2001-02
|
16.10.2001
|
Guidelines for Classification
and Valuation of Investments - Modifications / Clarifications
|
8.
|
DBOD.No.BP.BC.96/21.04.048/2002-2003
|
23.04.2003
|
Guidelines on Sale of
Financial Assets to Securitisation Company / Reconstruction Company
|
9.
|
IDMC.MSRD.4801/06.01.03/2002-03
|
03.06.2003
|
Guidelines on Exchange Traded
Interest Rate Derivatives
|
10.
|
DBS.FID.No.C-5/01.02.00/2003-04
|
01.08.2003
|
Guidelines for Consolidated
Accounting and Consolidated Supervision
|
11.
|
DBS.FID.No.C-11/01.02.00/2003-04
|
08.01.2004
|
Final Guidelines on investment
by the FIs in debt securities
|
12.
|
DBOD.No.FID.FIC.8/01.02.00/2009-10
|
26.03.2010
|
Additional Disclosures in
Notes to Accounts
|
13.
|
DBOD.No.FID.FIC.9/01.02.00/2009-10
|
26.03.2010
|
Prudential Norms on Income
Recognition, Asset Classification and Provisioning pertaining to Advances
- Computation of NPA Levels
|
14.
|
DBOD.FID.FIC.No.5/01.02.00/2010-11
|
18.08.2010
|
Sale of Investments held under
Held to Maturity (HTM) Category
|
15.
|
DBOD.FID.FIC.No.8/01.02.00/2010-11
|
02.11.2010
|
Prudential Norms for Off
Balance Sheet Exposure - Bilateral netting of counterparty credit
exposures
|
16.
|
DBOD.BP.BC.No.99/21.04.132/2012-13
|
30.05.2013
|
Review of Prudential
Guidelines on Restructuring of Advances by Banks and Financial
Institutions
|
17.
|
DBOD.FID.FIC.No.5/01.02.00/2012-13
|
17.06.2013
|
Review of Prudential
Guidelines on Restructuring of Advances by Banks and Financial
Institution
|
18.
|
DBOD.BP.BC.No.97/21.04.132/2013-14
|
26.02.2014
|
Framework for Revitalising
Distressed Assets in the Economy - Guidelines on Joint Lenders' Forum
(JLF) and Corrective Action Plan (CAP)
|
19.
|
DBOD.BP.BC.No.98/21.04.132/2013-14
|
26.02.2014
|
Framework for Revitalising
Distressed Assets in the Economy - Refinancing of Project Loans, Sale of
NPA and Other Regulatory Measures
|
20.
|
DBR.No.FID.5/01.02.00/2014-15
|
11.06.2015
|
Guidelines on Sale of
Financial Assets to Securitisation Company (SC)/ Reconstruction Company
(RC) and Related Issues
|
|