Question mark over preparedness for GST rollout by July 1: Banks tell panel
As the government marches ahead for July 1 rollout of GST, Indian Banks’ Association has raised a question mark on the preparedness of the sector.
“Several Services by bank to a customer are centralised while several others are localised. As is evident, these complexities add to the compliance cost due to multiple assessments and audits. Banks will have to make changes in the existing infrastructure, which would be a huge challenge for the banks. IBA had taken up the case for central registration. Since the GST will be operational from July 1, banks have to make lot of changes in their systems and other procedures. The preparedness of all banks for the implementation of GST on July 1 2017 is a question mark,” IBA said in its written submission (accessed by The Indian Express) before the Department Related Committee of Parliament on Finance headed by senior Congress leader M Veerappa Moily.
Indian Banks Association (IBA) chairman and Central Bank of India CMD Rajeev Rishi and IBA deputy chairperson and ICICI MD & CEO Chanda Kochhar were among the bankers called before the panel as witnesses.
One key challenge banks face is completing the norm of mandatory registration in each state for which they will need to maintain state-wise revenue data and operating IT solutions in order to raise invoices for their business clients. In the absence of such GST-compatible IT systems, they might face operational hiccups.
While as per rules, all banks will now have to register in each state, some of them are hopeful that the government will allow them centralised registration so that they are not forced to change their front-end IT systems. There is no indication from the government to consider this so far.
A number of banks are yet to configure their systems as per the new requirements.
The response of the banks on the GST issue has come before the Parliamentary panel on a day when finance minister Arun Jaitley asked the industry to brace itself for GST and said that he will expect that the industry, or those sections which are not ready, should fall in line because the government was quite clear about the date.