“RBI shifts LRS return reporting from XBRL to CIMS, streamlining financial reporting. Circular effective from Dec 26, 2023. Compliance insights and changes for AD Category-I Banks.”

Financial Reporting Revamp: RBI’s Transition of LRS Return’s submission from XBRL to CIMS

The RBI recently through its circular notified the discontinuance of the reporting requirement of LRS return through the eXtensible Business Reporting Language (hereinafter, XBRL) site and shifted the submission to Centralised Information Management System (hereinafter, CIMS).

The circular brings a transition for AD Category-I Bank in terms of requirement to upload the application and amount remitted under LRS. Keeping in effect from December 26, 2023, CIMS, a new data’s warehouse will ensure the storage of both the return [no. of applications received and total remitted amount under LRS Scheme]. Pursuant to that, on the CIMS site, return codes “R089” and “R010” for the LRS monthly return and LRS daily return, respectively, have been assigned.

The discontinuance of XBRL legacy shifted previously from Online Return filing system (hereinafter, ORFS) but this data warehouse’s legacy been seen from the very beginning of 1945 which later been followed by the computerisation of significant data storage and its management & analysis by the experts to frame out the reliable statistics over the subject-matters.

Discontinuance of ORFS and XBRL’s Site: Bank’s Data Warehouse

The very initial ‘Centralised Database Management System’ (CDBMS) prevalent around 2002 was operational data warehouse for RBI’s internal users but soon the same with the deployment of Internet being used as a centralised database management system for Indian Economy rather limiting it for Internal users of RBI.

With expansion of storage of data of different domains, the existing RBI’s data warehouse (XBRL) been overhauled and the CIMS proactively launched as a centralised database warehouse for storing and managing the macro and micro data providing reliable statistics and analytical solutions.

AD Category Bank-I required to collect and maintain the report on the total no. of applications received and total amount remitted under LRS through the ORFS every month from October 2008 but here double obligation been put forth in respect of maintaining report through ORFS in addition to maintenance of hard copy. Pursuant to set obligations, the RBI mandated the submission of hard as well as soft copy of record before every 5th of the succeeding months.

With the advancement of internet and for bringing the whole submission of LRS return monthly, the requirement of filing return in hard copy been revoked and solely put reliance on the filing made through ORFS. The RBI through its circular, not only issued statement regarding filing return monthly but also stated to upload ‘nil figures’ in circumstances where there is no availability of data to furnish.

Later, on June 17, 2021, the RBI through its another circular on ‘Reporting of LRS for Resident Individual’ shows transition of medium from ORFS to XBRL. The RBI here, alike the previous circular set out the same requirement of timeline and uploading the ‘nil figures’. On the XBRL site, the AD Category-I Banks were required to submit the said statements categorising into half-yearly statement and monthly statement.

1. In the month of March/September, certain amount and value of gold being imported by different banks, agencies, EoUs, and SEZs in the gem industry for their prescribed purposes. A split according to the method of payment was also included in the report that being submitted half yearly.

2. The amount and value of gold imports by designated organizations in the gem and jewellery industry (apart from banks), EOUs, and SEZs. Monthly data as well as a cumulative position from the beginning of the fiscal year were presented in the report.

Both the categorisation of filing (Half Yearly and Monthly) for XBRL continued and shifted to Centralised Information Management System (CIMS). Now, the RBI has assigned specific codes to the respective categorisation. ‘Import of gold through EOUs, SEZ/EPZ units, and nominated agencies (M)” and “Import of gold through EOUs, SEZ/EPZ units, and nominated agencies (HY)” been given the codes “R132” and “R133” respectively on the CIMS Portal.

With the ongoing segment of filing/reporting ‘quarterly data’ for the issuance of guarantees for trade credit on XBRL, the RBI decided to shift the said arrangement to Centralised Information Management System (CIMS). What’s been called putting dual constraint, seen from the perspective of AD Category Bank-I who already have been onboarded on CIMS site yet filing return on both the [CIMS and XBRL] portal.

Regulatory Directives and It’s Compliance: A Cursory Glance

The recent circular dated 22nd December 2023, contained specific directions that been in compliance with the FEMA regulations. The circular explicitly mentioned the passing of direction is in accordance to the specific provision i.e. Section 10(4) and 11(1) of the Foreign Exchange Management Act, 1999. But, why this compliance with the specific provision is required, is a crucial question. The bare analysis of the Section 10(4) and 11 (1) explains the power granted to RBI to direct the ‘authorised persons’ to act in a set pattern and regarding their conduct while dealing with foreign exchange.

The RBI ensures the transition of reporting requirement from time to time with the latest version/websites comply with the provisions of FEMA and from nowhere the direction provided through the circular prejudice the stated law and existing framework.

Conclusion and Embracing Change

While the RBI showing progressive and navigating steps towards ensuring better foreign exchange reporting and providing reliable statistics based on such report. But the RBI loses its focus in midway on some aspects leading lapses in that. The prima facie what gets my goat there, is that for the country like India, which is a very smoothed-friendly economy and having profusion of governmental departments, engross into foreign exchange issues and put forth the requirement of several filing of returns.

Being already bowed down with the filing of returns in different forms then what’s the requirement of specifically putting forth the requirement of submitting NIL returns, in case of not having any such filings.

With the recent circular on pedestal, the XBRL transition completed to CIMS. Still, there ongoing on dual filing of report on XBRL and CIMS both, putting unwanted burden on authorised person. These are the facets that been overlooked by the RBI, and the RBI should ensure these rectifications and embrace the change positively.


Author: Rohit Raj | B.A. LL.B. | 5th Year | Batch 2024 | Lloyd Law College, Greater Noida 

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February 2024