Written by Vinod Kashyap Posted on July 22, 2010
Vinod Kashyap is a Director at NextGen Knowledge Solutions Private Ltd., which is engaged in the business of conducting training courses on XBRL for banks, corporations, and financial professionals in India. He is a member of the Institute of Chartered Accountants of India and is a qualified Information Systems Auditor.
XBRL is making steady progress in India for external and internal reporting of banks and companies. These advances are underpinned by the work of XBRL India, a provisional jurisdiction of XBRL International.
Recognizing the enormous benefits that an XBRL-based reporting system offers, the Reserve Bank of India (RBI) formed a high-level steering committee for the purpose of adopting XBRL for various returns being submitted by India’s commercial banks. On October 6, 2008, the RBI launched its XBRL-based electronic filing system for capital adequacy return (RCA II), which is based on the Basel II-related capital measurement framework. India is one of the few, if not the only, developing country that has implemented XBRL-based reporting of data under Basel II. RBI has also developed a taxonomy for two more returns being submitted by commercial banks, namely, (1) the Gaps Position and Balances return for monitoring compliance of the cash reserve ratio (CRR) by banks, and (2) the so-called Return A for monitoring net overnight open positions and aggregate gap limit by banks authorized to deal in foreign exchange. RBI is in the process of adopting taxonomies for several other returns, including annual and quarterly financial statements.
Turning to operating companies, the Institute of Chartered Accountants of India (ICAI) has completed a draft financial reporting taxonomy for commercial and industrial (C&I) companies, which awaits approval of XBRL International. ICAI has also finished work on a draft XBRL banking taxonomy, an extension to the core C&I taxonomy.
The Bombay Stock Exchange and National Stock Exchange, India’s two leading stock exchanges, have already adopted an XBRL-based reporting system under a unified electronic platform popularly known as the CorpFiling system. Currently, the top 100 companies in India are using CorpFiling to submit their disclosures to the two exchanges.
The Central Electricity Regulatory Commission (CERC), the regulatory body for the power sector in India, has embarked upon development of an XBRL-based Regulatory Information Management System (RIMS) that would facilitate information collection, regulatory analysis, compliance monitoring, decision-making, and other regulatory functions.
Finally, the Ministry of Corporate Affairs (MCA) has decided to implement an XBRL-based financial reporting system for all companies in India from April 1, 2011. There are about 900,000 companies that submit data to MCA. However, the necessary regulatory notification from MCA on this system has not yet been made.
Not much has been done so far by the accounting bodies in India to educate their members on XBRL. In the absence of sufficient XBRL-trained professionals in India, companies will find it difficult to adopt an XBRL-based reporting system if implemented as scheduled from 2011. In addition, it is expected that a very substantial amount of work will also be generated because of outsourcing from other countries. Clearly, after perhaps a relatively slow start compared with some other Asian nations, India is emerging as a significant force in XBRL adoption.
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