XBRL Adoption Gains Ground
Indian banks are submitting their BASEL II-based Return on Capital Adequacy (RCA2) returns to the Reserve Bank of India (RBI) in the Extensible Business Reporting Language (XBRL), format.
XBRL involves business reporting to all types of regulators, including tax and financial authorities, central banks and governments. It also enables filing of loan reports and applications; credit risk assessments, exchange of information between government departments or between other institutions, such as central banks.
The RBI had, in October last year, asked all banks to start preparing for submitting statements in the XBRL format complying with the Basel II mandate. Till date, it has converted five return files in the XBRL, and plans are afoot to convert the rest (220 more returns) in gradual phases.
"IRIS has built an electronic filing system (IRIS iFile). It is a simple spread sheet in which banks have to feed the data. The data is automatically converted into the XBRL format before being transmitted to the RBI," said Shweta Gupta from IRIS, in an exclusive interaction with CXOtoday.
Compliance and regulations are driving the financial institutions and the non banking financial companies in India to adopt the XBRL for applications beyond financial reporting.
Gupta who co-authored a white paper with Kim Wallin, state controller of Nevada, and Liv Watson, vice chairman for XBRL International, outlines how XBRL can achieve a long envisioned objective of providing an integrated platform across various agencies within a state government, thereby simplifying the costs of doing business. IRIS will soon modify this whitepaper by adding appendices in context to India.
Giving an example of how the system works she said, "Currently new businesses need to go through various departments and fill in the same data to obtain all permits, licenses and so on to do business. This can be very tedious. And every place you go, you have to fill out a form with your name, address, ID number — basically the same information at each location. If you use XBRL in a business portal, you would fill out name, address, ID number, etc. and then the data can go out and populate other systems through an integrated business system."
What IRIS offers is a layer in the form of standard that talks to any other standard. "So in this case, the system knows that the agencies have approved the forms and validated information. Even the businessman can login and can track at what level his application is pending."
So what can propel this language? "The push has to come from the top," said Gupta. In the financial services segment, the BSE and the NSE have enabled filing of corporate filings in the XBRL. The XBRL component has been installed at the back-end.
"Individually, IRIS wants to develop portals for companies to convert and publish XBRL information on their websites. Even banks would want to use XBRL internally to streamline their processes. The reason being this information is validated and accurate. It can be consumed by applications. And one can get better analysis."
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