The Ministry of Finance on Monday announced the roadmap for a new set of accounting standards-the Indian Accounting Standards (Ind AS)-for scheduled commercial banks, insurance companies and non-banking financial companies. The new standards, which bring India’s accounting norms in line with the International Financial Reporting Standards, will come into effect from April 1, 2018 onwards.

“In pursuance to the Budget Announcement by the Union Finance Minister Shri Arun Jaitley, after consultations with Reserve Bank of India (RBI), Insurance Regulatory and Development Authority(IRDA) and Pension Fund Regulatory and Development Authority (PFRDA), the following roadmap for implementation of Indian Accounting Standards (Ind AS) converged with International Financial Reporting Standards (IFRS) for scheduled commercial banks (excluding RRBs), insurers/insurance companies and Non-Banking Financial Companies (NBFCs) has been drawn up,” the Ministry said in a notification.

All scheduled commercial banks, excluding urban cooperative banks and regional rural banks, and insurance companies will have to prepare Ind AS-compliant financial statements from April 1, 2018 onwards while also drawing up comparative statements for the preceding periods.

The new accounting standards will be applicable to NBFCs in two phases. In the first phase, the new standards will have to be adopted by NBFCs with a net worth of Rs. 500 crore or more. This applies to any holding, subsidiary, joint venture or associate companies of such NBFCs.

The second phase, applicable from April 1, 2019, will be for “NBFCs whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth less than Rs. 500 crore.”

NBFCs that are not covered in either of these provisions and that are unlisted with a net worth of between Rs. 250-500 crore will also have to change their accounting standards by April 1, 2019.

“NBFCs having net worth below Rs. 250 crore and not covered under the above provisions shall continue to apply accounting standards specified in Annexure to Companies (Accounting Standards) Rules, 2006,” the statement said.

“Scheduled commercial banks (excluding RRBs)/NBFCs/insurance companies/insurers shall apply Indian Accounting Standards only if they meet the specified criteria, they shall not be allowed to voluntarily adopt Indian Accounting Standards (Ind AS),” the statement added.

The draft rules will be issued by the Ministry of Corporate Affairs, RBI and IRDA soon.