RBI issues guidelines for appointment of Auditors in PSBs
Published: Aug 08, 2018
By TIOLCORPLAWS News Service
NEW DELHI, AUG 08, 2018: Owing to the irregularities, lapses and fraudulent transactions detected by auditors in their internal audit, RBI has issued Guidelines for appointment of Statutory Central Auditors (SCAs) and Statutory Branch Auditors in Public Sector Banks (PSBs), which covers eligibility, empanelment and selection as well as the procedure for appointment of such auditors. The RBI has also specified the minimum standards required to be satisfied by audit firms for appointment as SCAs as well as the appointment, rest period, treatment of group of audit firms having common partners, maximum number of banks that an audit firm can undertake statutory audit assignment, in the case of Private Sector Banks and Foreign Banks. In regard to SCBs, RBI has also advised that Statutory Auditors have to be appointed for all the overseas branches every year.
As per existing audit, RBI has apprised that its guidelines to SCBs lay down the broad parameters for scope, coverage, types of activities to be covered, appointment of auditors etc. RBI has also mandated a Minimum Audit Programme in form of a checklist, while stipulating that the detailed scope of concurrent audit may be determined and approved by Audit Committee of the bank's Board of Directors. As mentioned in internal audit, RBI has apprised that it has issued detailed guidelines on risk-based Internal Audit System in banks. These mandate banks to put in place well-defined policy, duly approved by their Board, for undertaking risk-based internal audit, and cover areas such as risk assessment process, scope and coverage of internal audit, performance evaluation, review of internal audit function.
As per RBI data, the number of complaints against Commercial Banks pertaining to deficiencies in banking services, received in the offices of the Banking Ombudsmans of RBI was 1,02,894 for the financial year (FY) 2015-16, 1,30,987 for FY 2016-17, and 1,63,590 for FY 2017-18. RBI has further apprised that action has been taken on the complaints as per the provisions of RBI's Banking Ombudsman Scheme, 2006.
