Segment reporting is one of the important disclosures based on segmentation. The RBI has issued a set of new guidelines in April, 2007 to provide better and objective disclosure standards for segment reporting in banks. Unlike AS-17 norms, Indian banks are now required to disclose five business segments—treasury, corporate/wholesale banking, retail banking, other business operations and residual operations w.e.f. March, 2008. While we have guidelines now in place, the objective will be achieved only when bank managements are proactive in information disclosure, which will result in better corporate disclosure.

When it comes to segment reporting of business results by banking companies, there is a clash of norms under Companies Act and the Accounting Standard- 17 (AS-17) stipulated by the Institute of Chartered Accountants of India (ICAI) and other guidelines issued by the Reserve Bank of India (RBI).

AS-17 deals with accounting, presentation and disclosure of financial statements of reportable segments of an enterprise which could be a business segment (i.e., a product, a division, a unit, a process or a class of products or services or a business classified as a distinguishable business segment) or a geographic segment based upon geographic boundaries, locations, nature of risks associated with businesses, regulations, operations in different locations etc., (e.g., exports, imports, domestic, international, regional segmentation, etc.).

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