International Journal of Finance and Accounting 2012, 1(5): 94-105 DOI: 10.5923/j.ijfa.20120105.03 IFRS S in Indian Banking Industry: Challenges Ahead Sankar Thappa School of Business, Kaziranga University, Jorhat, 785006, India Abstract The globalization has brought a lot of changes in doing business across the world. The business of multinational companies are being extended and established in various countries with emerging economies .These companies in emerging economies are increasingly accessing the global markets to fulfill their capital needs by getting their securities listed on the stock exchanges outside the country. This results in making the Capital markets global in nature. The use of different accounting frameworks in different countries creates confusion for users of financial statements resulting into inefficiency in capital markets across the world. The increasing complexity of business transactions and globalization of capital markets call the regulators, multinational companies, auditing firm and investors to see the need for common standards in all areas of financial reporting. Thus, the case for a single set of globally accepted accounting standards has prompted many countries to pursue convergence of national accounting standards with IFRS. After the liberalization and tremendous growth of Indian Economy, the Indian MNCs are also going global. These companies have been also raising capital from global capital market. Under these circumstances, it has become imperative for Indian corporate to adopt IFRS for their financial reporting. The Government of India had committed to convergence of Indian Accounting Standards with IFRS from April 1, 2011. With respect to banking companies requires all scheduled commercial banks to convert their opening balance sheets as of April,1.2013. The industry has recognized the need for IFRS convergence. Realizing the need of the time the Indian banks show eagerness towards time bound implementation, giving top priority to the convergence process. Similarly, various Regulators RBI, SEBI, IRDA are also taking interest in relation to frame/revise regulations in consultation with ICAI.The objective of this paper is to examine the impact of IFRSs in Indian banking Industry, the various phases of implementation of IFRSs in the banking sector in India. The paper also highlights on the challenges ahead in the implementation of IFRS in Indian banking sector and the possible ways to address the challenges. The study is primarily based on the secondary data gathered from related literature published in the journals, newspaper, books, statements, reports. The nature of study is primarily qualitative, descriptive and analytical. The IFRSs in Indian Banking Industry would bring many benefits to the industry along with some challenges like changes to the existing law, skilled manpower, increasing cost etc. which are to be taken care of in the future very well. Keywords GAAP, IFRS, IAS, SIC, ICAI 1. Introduction The globalisation has brought a lot of changes in doing business across the world. The business of multinational companies are being extended and established in various countries with emerging economies .These companies in emerging economies are increasingly accessing the global markets to fulfil their capital needs by getting their securities listed on the stock exchanges outside the country. This results in making the Capital markets global in nature. The use of different accounting frameworks in different countries creates confusion for users of financial statements resulting into inefficiency in capital markets across the world. The increasing complexity of business transactions and globalization of capital markets call the regulators, * Corresponding author: sankarbhakta@gmail.com (Sankar Thappa) Published online at http://journal.sapub.org/jfa Copyright © 2012 Scientific & Academic Publishing. All Rights Reserved multinational companies, auditing firm and investors to see the need for common standards in all areas of financial reporting. Thus, the case for a single set of globally accepted accounting standards has prompted many countries to pursue convergence of national accounting standards with IFRS. After the liberalisation and tremendous growth of Indian Economy, the Indian MNCs are also going global. These companies have been also raising capital from global capital market. Under these circumstances, it has become imperative for Indian corporate sector to adopt IFRS for their financial reporting. The Government of India had committed to convergence of Indian Accounting Standards with IFRS from April 1, 2011. The finalized roadmap for the convergence of Indian Accounting Standards with the International Financial Reporting Standards (IFRS) with respect to banking companies requires all scheduled commercial banks to convert their opening balance sheets from April 1, 2013. RBI has emphasized to banks that they need to gear up to adopt the new standards.