Corporation Bank first to adopt

Corporation Bank first to adopt
ENS ECONOMIC BUREAU

New Delhi, June 30: Corporation Bank has become the first public sector bank in the country to adopt US Generally Accepted Accounting Practices (GAAP) accounting standards.

However, the bank has no ``immediate'' plans for overseas listing. Announcing the adoption of US GAAP standards here on Friday, the bank's executive director NS Gujral said that Corporation Bank had achieved the distinction of being the first among the public sector banks to have published its accounts according to the US accounting standards.

Gujral said that though the bank did not intend to access the US markets immediately, conversion of accounts was taken up as a voluntary exercise to meet the growing expectations of investors, both in India and abroad.

The US GAAP is mandatory for listing in American exchanges, and is adopted by companies going for overseas listing.

It differs in certain material respects from the accounting principles generally accepted in India. Main differences between US GAAP and the Indian GAAP relating to the banking industry are in the areas of measurement of loan loss provisions, valuation of investments, consolidation of subsidiaries, recognition of deferred taxes and the presentation and format of the financial statements and notes.

Gujral said that the benefits to the bank by adopting US GAAP included wider acceptability in the investor/analysts community, improved internal decision-making processes and internal reporting system, better credit rating and reduced cost of borrowings.