Financial Reporting by Banks, Insurance Companies and NBFCsFinancial Statements Analysis NotesB.Com Notes 6th Sem CBCS Pattern
Unit – 4: Financial
Reporting By Banks, Insurance Companies and NBFCs
Q. Give a brief note on IRDA’s Guidelines on accounting and
auditing of Insurance Companies. 2014,
2016, 2018
Q. Give a brief note on suggestions made by the RBI’s Advisory
group on accounting and auditing of Banks. 2015, 2017, 2019
Q. Give a brief note on suggestions made by the RBI’s Advisory group on accounting and auditing of NBFC and FIs. 2015, 2016, 2017, 2019
-------------------------------------------------------------
MEANING OF A BANKING COMPANY
A banking company is defined as a company which transacts the
business of banking in India. Section 5 (b) of The Banking Regulation Act, 1949
defines the term banking as “accepting for the purpose of lending or investment
of deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheque, draft, order or otherwise.
Section – 7 of this Act makes it essential for every company
carrying on the business of banking in India to use as part of its name at
least one of the words – bank, banker, banking or banking company. Section 49A
of the Act prohibits any institution other than banking companies to accept
deposit money from public withdraw able by cheque. The essence of banking
business is the function of accepting deposits from public with the facility of
withdrawal of money by cheque. In other words, the combination of the functions
of acceptance of public deposits and withdrawal of the money by cheque by any
institution cannot be performed without the approval of Reserve Bank.
Features of Banking: The following are the basic characteristics
to capture the essential features of Banking:
a) Dealing
in Money: The banks accept deposits from the public and advance the same as
loans to the needy people. The deposits may be of different types – current,
fixed, savings, etc. accounts. The deposits are accepted on various terms and
conditions.
b) Deposits
must be withdraw able: The deposits (other than fixed deposits) made by the
public can be withdraw able by cheques, draft or otherwise, i.e., the bank
issue and pay cheques. The deposits are usually withdraw able on demand.
c) Dealing
with credit: The banks are the institutions that can create credit i.e.,
creation of additional money for lending. Thus, “creation of credit” is the
unique feature of banking.
d) Commercial
in nature: Since all the banking functions are carried on with the aim of
making profit, it is regarded as a commercial institution.
e) Nature
of agent: Besides the basic function of accepting deposits and lending money as
loans, bank possesses the character of an agent because of its various agency
services.
DISCLOSURE OF ACCOUNTS AND BALANCE SHEETS OF BANKS (RBI Guidelines)
There are various types of users of the financial statements of
banks who need information about the financial position and performance of the
banks. The financial statements are required to provide the information about
the financial position and performance of the bank in making economic decisions
by the users. The important information sought by these users are, about bank’s
Liquidity and solvency and the risks related to the assets and liabilities
recognized on its balance sheet and to its off balance sheet items. This useful
information can be provided by way of ‘Notes’ to the financial statements,
hence notes become an integral part of the financial statements of banks. The
users can make use of these notes and supplementary information to arrive at a
meaningful decision. Some of the specific disclosure requirements in Bank’s
financial statement are given below:
a) Presentation: Summary of Significant Accounting Policies’ and
‘Notes to Accounts’ may be shown under Schedule 17 and Schedule 18
respectively, to maintain uniformity.
b) Minimum Disclosures: While complying with the requirements of
Minimum disclosures, banks should ensure to furnish all the required
information in ‘Notes to Accounts’. In addition to the minimum disclosures,
banks are also encouraged to make more comprehensive disclosures to assist in
understanding of the financial position and performance of the bank.
c) Summary of Significant Accounting Policies: Banks should
disclose the accounting policies regarding key areas of operations at one place
(under Schedule 17) along with Notes to Accounts in their financial statements.
The list includes – Basis of Accounting, Transactions involving Foreign
Exchange, Investments – Classification, Valuation etc, Advances and Provisions
thereon, Fixed Assets and Depreciation, Revenue Recognition, Employee Benefits,
Provision for Taxation, Net Profit, etc.
d) Disclosure Requirements: In order to encourage market
discipline, Reserve Bank has over the years developed a set of disclosure
requirements which allow the market participants to assess key pieces of
information on capital adequacy, risk exposures, risk assessment processes and
key business parameters which provide a consistent and understandable
disclosure framework that enhances comparability. Banks are also required to
comply with the Accounting Standard 1 (AS 1) on Disclosure of Accounting
Policies issued by the Institute of Chartered Accountants of India (ICAI). The
enhanced disclosures have been achieved through revision of Balance Sheet and
Profit & Loss Account of banks and enlarging the scope of disclosures to be
made in “Notes to Accounts”.
e) Additional/Supplementary Information: In addition to the 16
detailed prescribed schedules to the balance sheet, banks are required to
furnish the following information in the “Notes to Accounts”. Such furnished
(information should cover the current year and the previous year). “Notes to
Accounts” may contain the supplementary information such as:
1. Capital
(Current & Previous Year) with breakup including CRAR – Tier I/II capital
(%), % of shareholding of GOI, amount of subordinated debt raised as Tier II
capital. Also it should show the total amount of subordinated debt through
borrowings from Head Office for inclusion in Tier II capital etc.
2. Investments:
Total amount should be mentioned in crores, with the total amount of
investments, showing the gross value and net value of investments in India and
Abroad. The details should also cover the movement of provisions held towards
depreciation on investments.
3. Derivatives:
Forward Rate Agreement/Interest Rates Swap: Important aspects of the
disclosures would include the details relating to:
a. The
notional principal of swap agreements;
b. Losses
which would be incurred if counterparties failed to fulfill their obligations
under the agreements;
c. Collateral
required by the bank upon entering into swaps;
d. Nature
and terms of the swaps including information on credit and market risk and the
accounting policies adopted for recording the swaps etc.
4. Exchange
Traded Interest Rate Derivatives: As regards Exchange Traded Interest Rate
Derivatives, details would include the notional principal amount undertaken:
a. During
the year (instrument-wise),
b. Outstanding
as on 31st March (instrument-wise),
c. Outstanding
and not “highly effective” (instrument-wise),
d. Mark-to-market
value of exchange traded interest rate derivatives outstanding and not “highly
effective” (instrument-wise).
f) Qualitative Disclosure: Banks should discuss their risk
management policies pertaining to derivatives with a specific reference to the
extent to which derivatives are used, the associated risks and business
purposes served. This also includes:
a. The
structure and organization for management of risk in derivatives trading,
b. The
scope and nature of risk measurement, risk reporting and risk monitoring
systems,
c. Policies
for hedging and/or mitigating risk and strategies and processes for monitoring
the continuing effectiveness of hedges/mitigants, and accounting policy for
recording hedge and non-hedge transactions; recognition of income, premiums and
discounts; valuation of outstanding contracts; provisioning, collateral and
credit risk mitigation.
g) Quantitative Disclosures: Apart from qualitative disclosures,
banks should also included the quantitative disclosures. The details are both
Currency Derivatives and Interest rate derivatives.
h) Asset Quality: Banks’ performances are considered good based on
the quality of assets held by banks. With the changing scenario and due to number
of risks associated with banks like Credit, Market and Operational risks, banks
are concentrating to ensure better quality assets are held by them. Hence, the
disclosure needs to cover various aspects of asset quality consisting of:
a. Non-Performing
Assets, covering various details like Net NPAs, movement of NPAs (Gross)/(Net)
and relevant details provisioning to different types of NPAs including Write
off/write-back of excess provisions, etc., Details of Non-Performing financial
assets purchased, sold, are also required to be furnished.
b. Particulars
of Accounts Restructured: The details under different types of assets such as
(i) Standard advances (ii) Sub-standard advances restructured (iii) Doubtful
advances restructured (iv) TOTAL with details number of borrowers, amount
outstanding, sacrifice.
c. Banks
disclose the total amount outstanding in all the accounts/facilities of
borrowers whose accounts have been restructured along with the restructured
part or facility. This means even if only one of the facilities/accounts of a
borrower has been restructured, the bank should also disclose the entire
outstanding amount pertaining to all the facilities/accounts of that particular
borrower.
d. Details
of financial assets sold to Securitization/Reconstruction Company for Assets
Reconstruction.
e. Provisions
on Standard Assets: Provisions towards Standard Assets need not be netted from
gross advances but shown separately as ‘Provisions against Standard Assets’,
under ‘Other Liabilities and Provisions – Others’ in Schedule No. 5 of the
balance sheet.
f.
Other Details: Business Ratios:
(i) Interest Income as a percentage to Working Funds (ii) Non-interest income
as a percentage to Working Funds (iii) Operating Profit as a percentage to
Working Funds (iv) Return on Assets (v) Business (Deposits plus advances) per
employee (vi) Profit per employee.
i) Assets Liability Management: As part of Assets Liability
Management, the maturity pattern of certain items of assets and liabilities
such as deposits, advances, investments, borrowings, foreign current assets,
and foreign currency liabilities. Banks are required to disclose the
information based on the maturity patterns covering daily, monthly and yearly
basis.
j) Break up Exposures: Banks should also furnish details of
exposures to certain sectors like Real Estate Sector.
Exposure to Capital Market: Capital Market exposure details should
be disclosed for the current and previous year in crores. The details would
include direct investment in equity shares, convertible bonds, convertible
debentures and units of equity-oriented mutual funds the corpus of which is not
exclusively invested in corporate debt and also loan raised against such
securities. A bank must also disclose the risk associated with such
investments. The risks are to be categorized as Insignificant, Low, Moderate,
High, Very high, Restricted and Off-credit.
Apart from the above category of exposures, banks are required to disclose details relating to Single Borrower Limit (SGL)/Group Borrower Limit (GBL) exceeded by the bank, and Unsecured Advances are to be furnished. Miscellaneous items would include Amount of Provisions made for Income Tax during the year, and Disclosure of Penalties imposed by RBI, etc.
👉👉Financial Statements Analysis
AUDIT AND INSPECTION OF BANKING COMPANY
Audit: The balance sheet and the profit and loss account of a
banking company have to be audited as stipulated under Section 30 of the
Banking Regulation Act. Every banking company’s account needs to be verified
and certified by the Statutory Auditors as per the provisions of legal frame
work. The powers, functions and duties of the auditors and other terms and
conditions as applicable to auditors under the provisions of the Companies Act
are applicable to auditors of the banking companies as well. The audit of
banking companies books of accounts calls for additional details and
certificates to be provided by the auditors.
Apart from the balance sheet audit, Reserve Bank of India is
empowered by the provisions of the Banking Regulation Act to conduct/order a
special audit of the accounts of any banking company. The special audit may be
conducted or ordered to be conducted, in the opinion of the Reserve Bank of
India that the special audit is necessary;
a. In
the public interest and/or
b. In
the interest of the banking company and/or
c. In
the interest of the depositors.
The Reserve Bank of India’s directions can order the bank to
appoint the same auditor or another auditor to conduct the special audit. The
special audit report should be submitted to the Reserve Bank of India with a
copy to the banking company. The cost of the audit is to be borne by the
banking company.
Financial Reporting Requirements of Insurance Companies in India
To protect the interests of policyholders and to increase
transparency and credibility of insurance companies there is a need to have an
effective regulatory system for financial reporting of insurance companies.
Reporting requirements of insurance companies are different from that of other
companies, because of the concept of policyholders and shareholders’ fund,
segment reporting in respect of all the funds maintained by the company,
complexity of insurance contracts and insurance itself is an intangible
product.
Earlier the accounts of insurance companies were governed by
Insurance Act 1938, but passing of Insurance Regulatory Development Authority
Act (IRDA Act) in 1999 opened a new chapter for disclosure norms of insurance
companies. In the year 2002, the IRDA came up with regulations for the
preparation of the financial statements of insurance companies. According to
the Insurance (Amendment) Act, 2002, the first, second and third schedules
prescribed for balance sheet, profit and loss account and revenue account
respectively as given in Insurance Act, 1938 have been omitted. Now revenue
account, profit and loss account and balance sheet are to be prepared as per
the formats prescribed by IRDA. However, the statutes governing financial
reporting practices of insurance companies in India are: Insurance Act 1938,
IRDA Act, 1999 (including IRDA Regulations), Companies Act and Institute of
Chartered Accountants of India (ICAI).
IRDA Act
1999 (Including IRDA Regulations)
Insurance Regulatory Development Authority (IRDA) has prescribed
various regulations from time to time. Preparation of Financial Statements and
Auditor’s Report of Insurance Companies Regulations, 2002 are one of them.
These regulations are related to the financial reporting practices of insurance
companies. These regulations are important constituents of the Indian
regulatory regime. According to the regulations made by the authority in
consultation with the Insurance Advisory Committee, accounts of insurance
companies are prepared according to the prescribed formats given by the
authority. Details are given as under:
a) Preparation of Financial Statements: After the commencement of
Insurance Regulatory Development Authority, Regulations, 2002, all the life
insurance companies shall comply with the requirements of Schedule A and
general insurance companies with Schedule B of these regulations while
preparing their financial statements. The auditor’s report on the financial
statements of all insurance companies shall be in conformity with the
requirements of Schedule C. IRDA given the list of items to be disclosed in the
financial statements of insurance companies under Part II of Schedule A (for
life insurance companies) and Schedule B (for general insurance companies) of
the (Preparation of Financial Statements and auditor’s report of Insurance
Companies) Regulations, 2002. According to these regulations, following disclosure
will form part of financial statements of insurance companies:
1. Every
insurance company will disclose all significant accounting policies and
accounting standards followed by them in the manner required under Accounting
Standard I issued by the Institute of Chartered Accountants of India. (ICAI).
2. All
companies will separately disclose if there is any departure from the
accounting policies with reasons for such departure.
3. Disclosure
of investments made in accordance with statutory requirements separately
together with its amount, nature, security and any special rights in and
outside India.
4.
Disclosure of performing and
non-performing investments separately.
5.
Disclosure of assets to the extent
required to be deposited under local laws for otherwise encumbered in or
outside India.
6.
All the companies are required to
show sector-wise percentage of their business.
7.
To include a summary of financial
statements for the last five years in their annual report to be prepared as
prescribed by the IRDA.
8.
Disclose the basis of allocation
of investments and income thereon between policyholders’ account and
shareholders’ account.
9.
To disclose accounting ratios as
prescribed by the Insurance Regulatory and Development Authority.
Disclosure of following items is made by way
of notes to balance sheet:
1.
Contingent Liabilities.
2.
Actuarial assumptions for
valuation of liabilities for life policies in force.
3.
Encumbrance’s to assets of the
company in and outside India.
4.
Commitments made and outstanding
for loans, investments and fixed assets.
5.
Basis of amortization of debt
securities.
6.
Claims settled and remaining
unpaid for a period of more than six months as on the balance sheet date.
7.
Value of contracts in relation to
investments, for purchases where deliveries are pending and sales where
payments are overdue.
8.
Operating expenses relating to
insurance business and basis of allocation of expenditure to various segments
of business.
9.
Computation of managerial
remuneration.
10.
Historical costs of those
investments valued on fair value basis.
11.
Basis of revaluation of investment
property.
b) Management Report: According to the IRDA
Regulations 2002, all the insurance companies are required to attach a
management report to their financial statements. The contents of the management
report are given under PART IV (Schedule A and Schedule B) of these regulations
and reproduced below:
1.
Confirmation regarding the
continued validity of the registration granted by the IRDA.
2.
Certification that all the dues
payable to the statutory authorities has been duly paid.
3.
Confirmation to the effect that
the shareholding patterns and the transfer of shares during the year are in
accordance with the statutory or regulatory requirements.
4.
Declaration that the management
has not directly or indirectly invested outside India the funds of the
policyholders.
5.
Confirmation regarding required
solvency margins.
6.
Certification to the effect that
no part of the life insurance fund has been directly or indirectly applied in
contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating
to the application and investment of the life insurance funds.
7.
Disclosure with regard to the
overall risk exposure and strategy adopted to mitigate the same.
8.
Operations in other countries, if
any, with a separate statement giving the management’s estimate of country risk
and exposure risk and the hedging strategy adopted.
9.
Ageing of claims indicating the
trends in average claim settlement time during the preceding five years.
10.
Certification to the effect as to
how the values, as shown in the balance sheet, of the investments and stocks
and shares have been arrived at, and how the market value thereof has been
ascertained for the purpose of comparison with the values so shown.
11.
Review of assets quality and
performance of investment in terms of portfolio, i.e. separately in terms of
real estate, loans, investments. Etc.
12.
A schedule payments, which have
been made to individuals, firms, companies and organizations in which directors
of the insurance company are interested.
13) A responsibility statement indicating
therein that:
Ø In
the preparation of financial statements, the applicable amounting standards,
principles and policies have been followed along with proper explanations
relating to material departures, if any;
Ø The
management has adopted accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the company at the end of the
financial year and of the operating profit or loss and of the profit or loss of
the company for the year;
Ø The
management has taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the applicable provisions of the
Insurance Act, 1938 and Companies Act 1956 for safeguarding the assets of the
company and for preventing and detecting fraud and other irregularities;
Ø The
management has prepared the financial statements on a going concern basis;
Ø The
management has ensured that an internal audit system commensurate with the size
and nature of the business exists and is operating effectively.
Non-Banking Financial Company
A Non-Banking Financial Company (NBFC) is a
company engaged in the business of loans and advances, acquisition of
shares/stocks/bonds/debentures/securities issue by Government or local
authority or other marketable securities of a like nature, leasing, hire
purchase, insurance business, chit business but does not include any
institution whose principal business is that of agriculture activity,
industrial activity, purchase or sale of any goods (other than securities) or
providing any services and sale/purchase/construction of immovable property. A
non-banking institution which is a company and has principal business of
receiving deposits under any scheme or arrangement in one lump sum or in
instalments by way of contributions or in any other manner, is also a
non-banking financial company (Residuary non-banking company).
As per Sec. 45I(f) of RBI Act, 1934, a
non-banking financial company’’ means:
(i) a financial institution which is a
company;
(ii) a non-banking institution which is a
company and which has as its principal business the receiving of deposits,
under any scheme or arrangement or in any other manner, or lending in any
manner;
(iii) such other non-banking institution or
class of such institutions, as the Bank may, with the previous approval of the
Central Government and by notification in the Official Gazette, specify.
A Non-Banking Financial Company (NBFC) is a
company registered under the Companies Act, 2013 which is engaged in the
business of:
a)
loans and advances,
b)
acquisition of
shares/stocks/bonds/debentures/securities issued by Government or local
authority or other marketable securities of a like nature,
c)
leasing,
d)
hire-purchase,
e)
insurance business,
f)
chit business.
However, such a company but does not include any institution whose
principal business is that of:
a) agriculture
activity,
b) industrial
activity,
c) purchase or
sale of any goods (other than securities), or providing any services, and
d) sale/
purchase/ construction of immovable property.
Moreover,
a non-banking institution which is a company and has principal business of
receiving deposits, under any scheme or arrangement, in one lump sum or in
installments, by way of contributions or in any other manner, is also a
non-banking financial company (called a Residuary non-banking company).
RBI – GUIDELINES REGARDING FINANCIAL STATEMENTS OF NBFC’S
The issues related to accounting include
Income Recognition criteria, Accounting of Investments, asset classification
and provisioning requirements. These hav been provided in details in the RBI
Directions, namely “Non-Systemically Important Non-Banking Financial
(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2015” and “Systemically Important Non-Banking Financial
(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2015”.
RBI has prescribed that Income recognition
should be based on recognised accounting principles, however Accounting Standards and Guidance
Notes issued by the Institute of Chartered Accountants of India (referred to in these Directions as “ICAI” shall
be followed in so far as they are not inconsistent with any of these
Directions.
Income Recognition
1.
The income recognition of NBFCs,
irrespective of their categorisation, shall be based on recognised accounting principles.
2.
Income including interest/
discount/ hire charges/ lease rentals or any other charges on NPA shall be
recognised only when it is actually
realised. Any such income recognised before the asset became non-performing and remaining unrealised shall be
reversed.
3.
Income like interest /discount
/any other charges on NPAs shall be recognised only when actually realised, RBI also requires that income recognised
before asset becoming NPA should be reversed in the financial year in which such asset becomes NPA.
4.
The NBFCs are required to
recognise income from dividends on shares of corporate bodies and units of
mutual funds on cash basis, unless
the company has declared the dividend in AGM and right of the company to receive the same has been established,
in such cases, it can be recognized on accrual basis.
5.
Income from bonds and debentures
of corporate bodies and from government securities/bonds may be taken into account on accrual basis
provided it is paid regularly and is not in arrears.
6.
Income on securities of corporate
bodies or public sector undertakings may be taken into account on accrual basis provided the payment of interest
and repayment of the security has been guaranteed by Central Government.
Principles
for accounting of Investments
Investing
is one of the core activities of NBFCs, hence RBI requires the Board of
Directors to Frame investment policy of the company and implement the
same. The investments in securities shall be classified into current and
long term, at the time of making each investment. The Board of the
company should include in the investment policy the criteria for classification
of investments into current and long-term. The investments need
to be classified into current or long term at the time of making each
investment. There can be no inter-class transfer of investments on ad
hoc basis later on. Inter class transfer, if warranted, should be done
at the beginning of half year, on April 1 or October 1, and with the approval
of the Board. The investments shall be transferred scrip-wise, from
current to long-term or vice-versa, at book value or market value,
whichever is lower;
The
depreciation, if any, in each scrip shall be fully provided for and
appreciation, if any, shall be ignored.
Moreover,
the depreciation in one scrip shall not be set off against appreciation in
another scrip, at the time of such inter-class transfer, even in respect of the
scrips of the same category.
Valuation
of Investments
A) The
directions also specifies various valuation guidelines in respect of Quoted and
Unquoted current investments leaving the Long term Investments to be valued as
per ICAI Accounting Standards. It requires Quoted current investments to
be grouped into specified categories, viz. (i) equity shares, (ii) preference
shares, (iii) debentures and bonds, (iv) Government securities including
treasury bills, (v) units of mutual fund, and (vi) others.
The
valuation of each specified category is to be done at aggregate cost or
aggregate market value whichever is lower. For this purpose, the investments in
each category shall be considered scrip-wise and the cost and market value
aggregated for all investments in each category. If the aggregate market value
for the category is less than the aggregate cost for that category, the net
depreciation shall be provided for or charged to the profit and loss account.
If the aggregate market value for the category exceeds the aggregate cost for
the category, the net appreciation shall be ignored. Depreciation in one
category of investments shall not be set off against appreciation in another
category.
B) Unquoted
equity shares in the nature of current investments shall be valued at cost
or break-up value, whichever is lower. However, the RBI Directions has
prescribed that fair value for the break-up value of the shares may be
replaced, if considered necessary.
C) Unquoted
preference shares in the nature of current investments shall be valued at
cost or face value, whichever is lower.
D) Investments
in unquoted Government securities or Government guaranteed bonds shall be
valued at carrying cost.
E) Unquoted
investments in the units of mutual funds in the nature of current investments shall
be valued at the net asset value declared by the mutual fund in respect of each
particular scheme.
F)
Commercial papers shall be valued at carrying cost.
G) A long
term investment shall be valued in accordance with the
Accounting Standard issued by ICAI.
Preparation
of Balance Sheet and Profit and Loss Account
1.
Every non-banking financial
company shall prepare its balance sheet and profit and loss account as on March
31 every year. Whenever a non-banking financial company intends to extend
the date of its balance sheet as per provisions of the Companies Act, it
should take prior approval of the Reserve Bank of India before approaching
the Registrar of Companies for this purpose.
2.
Further, even in cases where the
Bank and the Registrar of Companies grant extension of time, the nonbanking financial
company shall furnish to the Bank a proforma balance sheet (unaudited ) as on
March 31 of the year and the statutory returns due on the said date.
Every non-banking financial company shall finalise its balance sheet
within a period of 3 months from the date to which it pertains.
3.
Every non-banking financial
company shall append to its balance sheet prescribed under the Companies Act,
2013, the particulars in the schedule as set out in Annex I.
Disclosures
in the Balance Sheet
1.
The directions specify certain disclosure
requirements in the balance sheet.
2.
Disclosure of provisions created
without netting them from the income or against the value of assets. The
provisions shall be distinctly indicated under separate heads of account as (i)
Provisions for bad and doubtful debts; and (ii) Provisions for depreciation in
investments.
3.
Provisions shall not be
appropriated from the general provisions and loss reserves held. Provisions
shall be debited to the profit and loss account.
4.
The excess of provisions, if any,
held under the heads general provisions and loss reserves may be written back
without making adjustment against the provisions.
5.
Every non-banking financial
company shall append to its balance sheet prescribed under the Companies Act,
2013, the particulars in the schedule as set out in Annex I.
6.
The following disclosure
requirements are applicable only to systemically important (Asset Size more
than Rs. 500 crores) non-deposit taking non-banking financial company:
a)
Capital to Risk Assets Ratio
(CRAR);
b)
Exposure to real estate sector,
both direct and indirect; and
c)
Maturity pattern of assets and
liabilities.”
7. The formats for the above disclosures are also specified by RBI.