Financial and regulatory reporting post acquisition

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    Case Study

    Financial and regulatory reporting post acquisition

    One of India’s largest banks by assets is the fourth largest bank globally by market capitalization. The acquired company was the largest housing finance company in India. Through its subsidiaries, it was also engaged in the broader financial services business of life insurance, general insurance, asset management, private equity, and student loan financing.

    Challenges faced by the client

    • The bank acquired the housing finance company and its subsidiaries
    • The bank is listed on the Indian and US exchanges. Post-merger, the subsidiaries of the housing finance company are required to:
    • Submit interim and annual Indian GAAP financial information for the bank’s reporting requirements in India; Compliance with regulatory reporting requirements to the Reserve Bank of India
    • Submit semi-annual and annual US GAAP financial information for the bank’s US GAAP reporting requirements
    • Standardization of processes and controls for compliance with the principles of Sarbanes Oxley Act, 2002
    • Multiple reporting requirements, complexity of reporting, stringent timelines, and limited team bandwidth required the bank to seek external support to ensure it adhered to the statutory and regulatory reporting requirements.

    Our team's role

    • We identified a team with extensive FS sector knowledge, US GAAP and SEC expertise, RBI accounting and regulations impacting banks, and SOX experience to furnish the required information to the bank.
    • Supported the subsidiaries with the identification of accounting policy differences with those followed by the bank under Indian GAAP as well as US GAAP; Quantification of the policy differences identified; Alignment of the chart of accounts and financial reporting formats; Updating and enhancing the existing risk control matrix under SOX requirements and supporting in designing formats and work-flows for regulatory reporting to RBI.

    The value our team added

    • The bank completed the first interim reporting under Indian GAAP following the merger, within their stipulated timelines of SEBI requirements – this required significant optimization of interim reporting by the various subsidiaries.
    • We assisted the subsidiaries by enhancing the SOX documentation, including remediation of design deficiencies.
    • The first set of regulatory submissions to RBI were completed without any delay.