2 minute read 10 May 2023
Year-end considerations 2023 for financial services

How entities in the financial services sector can plan their year-end closure

Jigar Parikh
By Jigar Parikh

EY India Financial Accounting Advisory Services Partner

Knowledge-driven about the business and reporting implications of regulations and Ind-AS

2 minute read 10 May 2023
Related topics Financial accounting advisory services Assurance Financial Services
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  • Year end consideration : Financial services sector supplement

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Critical updates on financial services sector to help finance leaders finalize their financial statements for FY23.

In brief 

  • Several amendments around the new accounting framework, such as expected credit loss, scale-based regulation for NBFCs, IFRS 17 for Insurance companies, Ind AS for mutual funds, will be critical for entities under BFSI sector.
  • It is important for the BFSI sector to evaluate key changes in the regulatory space, impacting accounting, disclosures, and compliance with regulations while finalizing their financial statements for FY23.

The year 2022 was full of disruptive factors such as high inflation, interest rate volatility, events in crypto market. The year 2023 has kickstarted with a few major events, such as failure of a few global financial institutions, which has increased the fear of global financial crises. In light of these events, governments and central banks all over the world have become more vigilant, especially in the areas of governance and controls.

Digital lending has undergone significant evolution. Digital lending platforms now have the means to reach beyond metro cities with a digital end-to-end credit cycle from origination and underwriting to disbursement and repayment. The Indian government and central bank have been taking measures to encourage digital lenders, to drive innovation while prioritizing the protection of consumer interests and minimizing risks to the financial system. In order to address some primary concerns in relation to digital lending like mis-selling to customers, exorbitant interest rates, unethical business conduct, RBI has issued guidelines on digital lending.

This EY publication, “Year-end considerations – financial services sector supplement” covers key changes which are relevant to the BFSI (Banking, Financial Services, and Insurance) sector and provides a glance at the regulatory changes that have been issued during this year, which have a consequential impact on accounting, disclosures, and compliance with regulations.

There have been various regulatory developments/ amendments during the financial year 2022 -2023, for the financial services sector entities taking into account the changing landscape for such entities, both global and domestic. The year has witnessed several amendments around new accounting framework, such as expected credit loss, digital lending, scale-based regulation for NBFCs, IFRS 17 for Insurance companies, and Ind AS for mutual funds.

The publication, divided into three sections, offers financial leaders in the financial services sector critical updates and insights for year-end closure. 

Section 1: Banks and NBFCs.

Section 2: Insurance

Section 3:  Wealth and asset management

How EY can help

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Summary

Some of the recent regulatory changes have a significant impact on the corporate reporting of the entities in financial services sector. There is a need for the entities to proactively understand these changes, assess their impact on financial statements and prepare their systems and processes to ensure a smooth transition to such changes. 

About this article

Jigar Parikh
By Jigar Parikh

EY India Financial Accounting Advisory Services Partner

Knowledge-driven about the business and reporting implications of regulations and Ind-AS

Related topics Financial accounting advisory services Assurance Financial Services
Upvote