Amid the ongoing crisis at Paytm Payments Bank Ltd, Ranjeet Kumar Agarwal, the newly elected President of the Institute of Chartered Accountants of India, mentioned on Sunday that the Financial Reporting Review Board ( FRRB ) may discuss the issues related to the fintech firm in the coming days.
Currently, the FRRB is engaged in reviewing the accounts of the tech-based education unicorn Byju’s due to alleged governance concerns, and the process is advancing well, as per the ICAI president.
Agarwal stated that, While we have not addressed the Paytm issue thus far, the FRRB is scheduled for a board meeting in the near future, during which it will contemplate appropriate actions if deemed necessary. No decisions have been made regarding this matter at this point, in an interview. The newly elected committees, including FRRB, within the ICAI are expected to convene meetings starting March.
It’s noteworthy that the Reserve Bank of India, the banking sector regulator, has already imposed restrictions on Paytm Payments Bank Ltd due to purported regulatory concerns. The FRRB may assess whether scrutiny of the financial records is warranted in light of allegations of regulatory lapses and their potential impact on the payment bank’s accounting, Agarwal mentioned.
He emphasized, “The board has discretion in choosing whom to review and when to do so. It operates on a robust system.” When asked about ICAI’s stance on Paytm, Agarwal clarified that the institute can initiate action either suo motu or based on complaints. Regarding Byju’s, he noted that the scrutiny progress is on track, and the report is expected to be available by the end of the year.
Agarwal explained the FRRB structure, stating, “The board has a three-tier structure – technical, group, and then the board review.” According to him, the FRRB is authorized to review the financial statements of listed companies. “In cases of significant negligence, further investigation is pursued. For minor issues, advisory guidance is provided,” Agarwal stated.
Established in July 2002, the FRRB is a crucial arm of the ICAI working towards enhancing financial reporting practices to bolster investors’ confidence in audited statements. Meanwhile, Byju’s, the troubled edu-tech firm, has been embroiled in disputes over alleged mismanagement and governance issues, leading to a leadership change proposed by investors in an Extraordinary General Meeting.
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