RBI to launch XBRL standards for Basel II Reporting System

The Reserve Bank of India will launch the Basel II reporting system using eXtensible Business Reporting Language (XBRL) through the existing Online Returns Filing System (ORFS) on October 6, 2008. Basel II Reporting System is the first reporting system based on XBRL. India is possibly the first among the developing countries to introduce XBRL standard in its reporting system. The system also makes use of latest technology tools, some of which are already built into its ORFS.

The Reserve Bank introduced the Online Returns Filing System (ORFS) for a few returns, such as, Section 42(2) Form A return of the Reserve Bank of India Act, with the objective of eliminating the need for paper based data submission. ORFS also removes submission of multiple copies of the same return to various departments of the Reserve Bank of India, thus simplifying the data reporting process both for the banks and for the Reserve Bank of India.

Select scheduled commercial banks are participating in implementation of the new capital adequacy framework as per the Reserve Bank of India guidelines. These banks include all the internationally active banks as well as some banks with only domestic presence. These banks would be required to submit data on capital structure to the Reserve Bank as per Basel II Reporting System on a quarterly basis. The return covers important parameters relating to the capital structure of banks.

XBRL is an electronic format for communication of business and financial data which is revolutionising business reporting around the world. The standardisation in-built in the XBRL documents provides significant benefits in the preparation, analysis and communication of business information. This open standard offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. XBRL enhances the usability and transparency of financial information reported under existing accounting standards, simplifies disclosure, and allows users to communicate financial information more readily and accurately. The XBRL global initiative is led by a non-profit organisation called XBRL International Inc. (XII), which has members from various agencies from more than 164 countries.



On visualising multiple benefits of XBRL based reporting system, the Reserve Bank Governor had constituted a High Level Steering Committee on XBRL-based Data Reporting System (Chairman: Shri V Leeladhar, Deputy Governor). Besides regulatory and data collection departments of the Reserve Bank, the High Level Steering Committee had members from Institute of Chartered Accountants of India (ICAI), Indian Banks' Association, a few banks and representatives of the software industry.

After substantial deliberations and a pilot study, the High Level Steering Committee decided to introduce XBRL standards for Basel II Reporting System, Section 42(2) Form A return of the RBI Act and financial statements. Of these, the Basel II Reporting System is being launched on October 6, 2008. The taxonomy for Basel II Reporting System is broadly aligned with the COREP framework of the European Union.

The High Level Steering Committee decided to introduce XBRL standards for all major returns being received from scheduled commercial banks to the Reserve Bank in phased manner. As a part of XBRL implementation, the Committee reduced the number of returns to be submitted from scheduled commercial banks to the Reserve Bank to 223 from 291.

All related XBRL taxonomies and schemas will be put on the Reserve Bank website for the benefit of data users and analysts. The XBRL reporting tools will be integrated into the existing Online Returns Filing System. The long-term objective of the project is to build an XBRL-repository for the banking sector.

The Reserve Bank identifies XBRL standards as a key development in the coming years, as indicated in the Review of Financial Sector Technology Vision Document, published in June 2007.

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