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

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.