RBI shares their experience of XBRL implementation

Reserve Bank of India, the apex financial institution of the country had implemented data collection in standardised format since 2008 as a part of their regulatory and supervisory function. The data which is collected from the commercial banks, financial institutions, authorised foreign exchange dealers and non-banking financial institutions is in XBRL format and is called Return. RBI rolled out the implementation in phases since 2008, wherein Phase I covered 7 returns, Phase II which started in 2012 covers 42 returns, and currently 97 returns have been developed for XBRL reporting. The list of the returns is available on the website of the Reserve Bank of India.

RBI – XBRL Implementation:

The 97 returns which are to be reported in XBRL covers the following:

Financial accounts of banks
Regulatory monitoring like Cash Reserve Ratio, Statutory Liquidity Ratio, Unclaimed Deposits, Gap Positions and Balances (GPB), Capital Adequacy(designed as per Basel II guidelines) etc.
Supervisory monitoring like Off-Site Monitoring and Surveillance System (OSMOS), Fraud Monitoring System

When the XBRL reporting was initiated by RBI it was limited to Scheduled Commercials Banks; it has now been extended to Urban Co-operative Banks, Non-Banking Financial Institutions (NBFCs) and primary dealers.

RBI has created a Central Repository of Information for Large Credits (CRILC) in order to track and review the exposures of large borrowers more effectively across banks and to take corrective measures.

The benefits that the Reserve Bank of India has derived from the implementation of XBRL are the following:

The Reserve Bank of India (RBI) has reaped several benefits from the adoption of XBRL technology, including:

Enhanced Information Accessibility

XBRL provides more comprehensive information on each data element, including definitions, hierarchy, interrelationships, and metadata. This facilitates better understanding and analysis of financial data, enabling more informed decision-making by regulators and stakeholders.

Improved Data Consistency and Accuracy

The use of XBRL ensures more consistent and accurate data through proper validation mechanisms. By standardizing reporting formats and data structures, XBRL minimizes errors and discrepancies in financial reporting, enhancing the reliability of regulatory data.

Reduction of Data Duplication

XBRL implementation eliminates unnecessary duplication of data in returns, leading to streamlined reporting processes and improved data management practices. This reduces redundancy and improves efficiency in regulatory reporting for both RBI and regulated entities.

Challenges for RBI in XBRL Adoption Efforts

Adopting the new technology (XBRL) was a big challenge for RBI as well as the regulated entities. Awareness creation among the regulated entities and numerous workshops including hands-on sessions were organised. RBI has also provided excel templates for data entry which is later converted into XBRL instance document and does validation on an offline mode. For complex reports it was difficult to generate reports based on XBRL standards. Currently XBRL data is moved to the Data Warehouse (DW) at the Reserve Bank and the reports are generated from the DW using a Business Object tool.

Awareness Creation and Training

RBI organized numerous workshops and hands-on sessions to raise awareness among regulated entities about XBRL and its implications for reporting. These efforts aimed to educate stakeholders and facilitate smooth adoption of the new technology.

Transition Tools and Support

RBI provided excel templates for data entry, which were later converted into XBRL instance documents and validated offline. However, for complex reports, generating XBRL-compliant reports posed challenges, necessitating additional support and resources for regulated entities.

Integration with Data Warehouse

Currently, XBRL data is transferred to the Data Warehouse (DW) at the Reserve Bank. Reports are then generated from the DW using Business Object tools, streamlining the reporting process and enhancing data accessibility and analysis capabilities.

By overcoming these challenges and leveraging the benefits of XBRL, RBI has enhanced the efficiency, accuracy, and transparency of regulatory reporting processes, fostering a more robust financial regulatory framework in India.

Reserve Bank has decided to take some corrective steps to improve the existing system of reporting in XBRL which are as follows:

Integration of Systems

The successful implementation of the project hinges on the ability of reporting entities to generate reports in XBRL format directly from their source systems. To achieve this, reporting entities will need to integrate multiple systems within their infrastructure and connect them to automated XBRL generation software. This integration will ensure seamless data flow and streamline the reporting process.

Transition to Element-Based Reporting

XBRL relies on tags and metadata to identify each data point within a report. In contrast to the existing return-based approach, the Reserve Bank is shifting towards an element-based reporting approach. This transition will involve tagging individual data elements within reports, enabling more granular and standardized reporting across entities.

Comprehensive Coverage

The ultimate objective of the Reserve Bank is to capture all relevant data under XBRL-based reporting for all regulated and supervised entities. This comprehensive coverage ensures that the reporting framework encompasses a wide range of financial and operational data, providing regulators with a holistic view of the entities under their purview.

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