Page 9 - Banking Finance April 2016

RBI CORNER

To promote digitization, paperless account opening RBI issues directions to

needed; says bankers banks on new account-
ing standards
To promote digitisation and a 'less cash Bankers said that accounts without sig-
economy', the banking sector has sug- nature could be allowed only for digi- The central bank has issued new di-
gested to the Reserve Bank of India to tal transactions or at biometric ATMs, rectives to banks on implementation
consider paperless account of International
opening, without a speci- as a tiered offering, adding Financial Re-
men signature (physically that such facilities were porting Stan-
signed). available in various countries dards - con-
like the US, the UK and Po- verged Indian
In a presentation made to land. Accounting Stan-
RBI Governor Raghuram dards (Ind AS).
Rajan, it was mentioned that methods A level-playing field with e-
such as one-time password, biometric market places was urged, stating that Banks have been asked to submit pro
authentication and digital signature all e-market places should accept ev- forma Ind AS financial statements to
could be used to open such accounts. ery payment instrument, besides mak- the RBI from the half year ended
ing two-factor authentication compul- September 30, 2016, onwards.
The industry observed that online veri- sory for all (there is no two-factor au-
fication of the customer and consent thentication for wallet users). The implementation of Ind AS is ex-
capture were possible using Aadhar, pected to significantly impact the fi-
through KYC details registered with Additionally, the industry pressed for nancial position of banks, including
NSDL, and the likes. suppression of two-factor authentica- the adequacy of capital, taking into
tion for low-ticket transactions. account Basel-III capital require-
ments. The RBI also wants the audit
RBI requires a tight monetary stance for longer committee of the bank's board to
oversee the projects of the Ind AS
Amid expectations that the RBI may further cut in- implementation process.
terest rates, the IMF has said the apex bank may
require a "tight monetary stance for longer". With According to the roadmap an-
finance minister Arun Jaitely sticking to the fiscal nounced by the Centre, banks have
deficit target of 3.5 per cent in the budget, there are to comply with Ind AS for financial
rising expectations that the RBI might ease interest statements for accounting periods
rates during its policy meet. beginning from April 1, 2018 on-
wards. Ind AS will be applicable to
RBI allows relaxation to Indian diamonds importers both standalone as well as consoli-
dated financial statements.
Reserve Bank has allowed banks to approve clean credit facility given by for-
eign supplier to Indian importers of rough, Commenting on the latest RBI direc-
cut and polished diamonds, even beyond tives, Charanjit Attra, Partner in a
180 days. member firm of EY Global, said this
was definitely a positive move. "The
"To ease the operational difficulties faced regulator wants banks to gear up for
by importers, it has been decided, in con- IFRS- converged Ind AS and enable
sultation with the Government of India, to them to become internationally com-
delegate the powers for permitting such petitive," he said.
clean credit for a period exceeding 180
days from the date of shipment to the AD banks," RBI said in notification in Attra, however, noted that the short
relation to import of rough, cut and polished diamonds. time period available for providing
pro forma financial statements may
At present the banks are permitted to approve clean credit to Indian importers turn out to be a challenge for banks.
for import of rough, cut and polished diamonds, for a period not exceeding 180
days.

BANKING FINANCE | APRIL | 2016 | 9