Updated: June 24, 2021 3:51:22 am
HDFC Chairman Deepak Parekh has expressed concern over the different accounting standards by housing finance companies, banks and insurance companies.
“Banks and insurance companies have not migrated to IndAS, but it has been 3 years since NBFCs have. While this isn’t a level playing field, it may be prudent to at least resolve these open-ended issues sooner than later,” Parekh said.
As per Parekh, non-banking financial companies, including HFCs have been following Indian Accounting Standards (IndAS), which is still not aligned with the prudential guidelines. “This results in differences in opinions between the inspection teams, regulated entities and even the auditors,” he said in the Chairman’s letter to the shareholders.
“Lenders are susceptible to losing their existing customers to other players who often lure them through lower interest rates or increased loan amounts. As there are no prepayment penalties on floating rate loans, a lender can take over a home loan rather effortlessly,” Parekh said.
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