Reporting Financial Institutions (RFIs) in India submit Statement of Reportable Accounts (61B) to CBDT, which in turn is shared with the participating jurisdictions, by the CBDT.
Though the system of reporting in 61B has been in vogue for more than eight years, RFIs in general have not achieved the desired level of ensuring high quality of data. This is evident from the recently circulated OECD observations of “second round of AEOI peer review”. The review copy was shared by CBDT with certain RFIs.
The following are some of the observations made by the peers (participating jurisdictions):
- Omission of Accounts: Financial accounts which were identified (by the jurisdiction) for a possible sharing of information were missing in the reports submitted by RFIs in India.
- Quality of Reported Data: Many countries have commented that the quality of data submitted by RFIs in India is very poor.
- Invalid TINs and Invalid Mandatory Fields: Many jurisdictions have faced a very low level of matching of TIN /other mandatory details. This has prompted them to give poor feedback (e.g., Australia, Croatia, etc) on the quality of data shared by India, in their peer-level review.
Poor quality of data submitted by RFIs in India has been worrying CBDT for the last couple of years.
In order to ensure/improve the quality of data, CBDT has made far-reaching changes in its “Report Generation and Validation Utility”, coupled with verification of format of TIN/functional equivalent in the portal, after upload of secure XML files by RFIs. Such changes have resulted in more than 80% of uploaded data getting rejected by CBDT due to defects. RFIs, during the last six months, have been grappling with the issue of submitting correction statements, but still a sizeable number of RFIs have not brought down the defects, due to several practical difficulties.
VSM’s Role in Improvement of Quality of Data:
What we do at VSM and how we may help RFIs in ensuring submission of correct data and bring the defects to near to NIL?
VSM is one among the very few application and service providers which has been providing FATCA-CRS consulting, processing, remediation and reporting services to many banks in India. We have our own application which carries out processing and generation of 61B report including exception reports which help banks to carry out rectification of reportable data. Early in April 2023 (soon after the release of revised Utility by CBDT), we studied the changes, its inter-linkages with data-pieces and very recently, we upgraded our processing application which takes into account all the changes made by CBDT. A very important change made in our application relates to TIN/functional equivalent in our application, as per OECD directions, besides incorporating suitable additional validations on the data both for individual and entity accounts. With the help of our revised application, we were able to drastically bring down the defects and rejection for all our clients.
Banks interested in availing our FATCA_CRS Services may contact us through
Website: banking.vsmsoftware.com or
Email: vsm@vsmsoftware.com for further details.
Author
V. Ravindran
Consultant-Banking