NICAI Update
CA Raj Chawla
Quotes of the day:
1. Both your words and water reflect an image. Clear water reflects your face, but kind words reflect your character.
2. You are a GOOD Person when Circumstances Suit your Temper But you Become an EXCELLENT Person when you make your Temper Suitable to any CIRCUMSTANCES.
NICAI Update:
1. The Central Information Commission (CIC) has advised the Income Tax Department to "institutionalise a taxpayer-friendly mechanism", flagging that taxpayers are often made to run from "pillar to post" while seeking resolution of their grievances.
2. The observation came in an order passed by Information Commissioner Vinod Kumar Tiwari while disposing of a complaint related to 'discrepancies' in TDS credited to the applicant over several assessment years. The commission noted that in several such cases, taxpayers are repeatedly forced to pursue authorities to reconcile discrepancies.
3. Reserve Bank of India has raised concerns over Non-Banking Financial Companies (NBFCs) granting fresh loans to borrowers who have already defaulted on earlier loans. This practice, known as "evergreening," can conceal the true level of stressed assets within a lender's balance sheet .
4. Key Observations by RBI:
· During inspections, RBI found instances where lenders were granting new loans to existing defaulters.
· The regulator has directed NBFCs to frame board-approved policies clearly specifying the circumstances under which such loans can be granted.
· These policies must include safeguards to prevent evergreening and ensure transparency in lending practices .
5. Regulatory Objective:
The move primarily targets larger NBFCs following Indian Accounting Standards (Ind AS).
6. RBI aims to strengthen risk management frameworks and ensure early recognition of stress before such accounts turn into Non-Performing Assets (NPAs) .
7. The RBI's directive is expected to improve governance standards within NBFCs and ensure that lending decisions are supported by risk assessments rather than ad-hoc judgments.
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With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
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