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XBRL returns for NBFC

The NBFCs are financial institutions established to provide financial services just like banks, and they don’t hold a banking license and are not regulated by a central authority. A Non-Banking Financial Company is registered under the Companies Act of 1956. It provides loans and advances, receives deposits, and is responsible for acquiring stocks, equities, and debentures, issued by the government or local authorities.

A financial institution can be categorized as an NBFC if its financial assets are over 50% of its total assets. The income from these financial assets is over 50% of the gross income. These non-financial institutions must submit various returns to the RBI concerning their deposits, prudential norms, compliance, etc. All these returns are filed following the Master direction – Non-Banking financial company returns orders of 2016. The Reserve Bank of India mandated all NBFCs to file their returns using the XBRL mode starting from the financial year 2019-20.

This provision applies to NBFCs if their asset size is two crores. Not engaging in providing loans does not exempt the NBFCs from this provision. All NBFCs must file the returns using the XBRL method without any exceptions.

XBRL returns applicable to NBFCs below 100 crores

  1. DNBS 02 is a return filed quarterly on critical financial parameters and indicators. It is filed by any NBFC that holds and accepts deposits, and this return is typically filed within 15 days of the end of the quarter.
  2. DNBS 10, the statutory auditor certificate, is an annual return filed within one month of finalizing the balance sheet. The NBFC cannot file this return after the 31st of December.
  3. DNBS 13 return outlines the overseas investment details. These returns are filed every quarter, 15 days after the end of the quarter. Any NBFC having some overseas investment must file the Overseas Investment Returns every quarter.

XBRL returns applicable to NBFCs above 100 crores below 500 crores –

  1. DNBS 04A is a quarterly return filed 15 days from the end of the quarter, and it is a short-term dynamic liquidity return filed by the NBFCs.
  2. DNBS 04B, a structural liquidity and interest rate sensitivity return, is filed every month within 10 days of the end of the month.
  3. Additionally, DNBS 02, DNBS 10, and DNBS 13 returns need to be filed by NBFCs above 100 crores and below 500 crores.

Points to remember regarding XBRL returns –

  • The Reserve Bank of India has discontinued all online filing of returns by the ND-NSI categories of NBFCs. All these NBFCs with an asset size of fewer than 500 crores are mandated to use the XBRL system as their sole return reporting system.
  • All the NBFCs are directed to register themselves on the XBRL platform and list the company’s contact details of the KMPs as prescribed by the Reserve Bank. The official mode of communication between the NBFCs and the department of non-banking supervision is only through the official mail ID used at the time of User ID generation to help access the online portal.
  • Every NBFC must create a statutory auditor ID in the XBRL portal as soon as they get access to the portal. The activation of the Auditor ID triggers a mail for the authentication of the submission of the DNBS 10 return.
  • Even if the NBFCs have NIL overseas investment, they are expected to file the DNBS 13 return.

Benefits of XBRL reporting-

While it is no surprise that XBRL allows better analysis of data with higher accuracy, other benefits include

  • Reduced manual interference and paper work
  • Quicker availability of data
  • Improved quality of information
  • Better insights decision making

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