August 11, 2009

Banks will soon have to shift to a new, more accurate, accounting standard where the value of assets will be based on current rather than historical cost.At a meeting with select bank chief executives on Monday at the RBI headquarters in Mumbai, RBI deputy governor Usha Thorat said banks will have to adopt the International Financial Reporting Standards (IFRS) by 2011.

In the meeting, the central bank also rejected requests by banks to extend the July 31 deadline for restructuring bad loans under a one-time dispensation as standard assets post the global meltdown.A bank CEO said adoption of IFRS would require banks to put in place core banking solution—moving from branch to centralised banking with IT support—across the entire banking network.