Banks, NBFCs must appoint auditors for 3 years: Reserve Bank of India

Non-deposit taking NBFCs with asset size (total assets) below Rs 1,000 crore have the option to continue with their extant procedure.
Reserve Bank of India (File Photo | PTI)
Reserve Bank of India (File Photo | PTI)

NEW DELHI:  The Reserve Bank of India (RBI) on Tuesday issued guidelines for appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) in commercial banks, urban co-operative banks and non-banking finance companies from FY22 onwards, whereby they will have to appoint SCAs/SAs for a continuous period of three years. However, UCBs and NBFCs will have the flexibility to adopt these guidelines from second half of FY22 to ensure that there is no disruption.

RBI guidelines regarding appointment of SCAs/SAs will be implemented for the first time for urban co-operative banks (UCBs) and non-banking finance companies/NBFCs (including housing finance companies) from FY22.

Non-deposit taking NBFCs with asset size (total assets) below Rs 1,000 crore have the option to continue with their extant procedure.

Commercial banks (excluding regional rural banks) and UCBs will be required to take prior approval of RBI for appointment or reappointment of SCAs/SAs on an annual basis. While NBFCs do not have to take prior approval. All NBFCs need to inform RBI about the appointment for each year.

For commercial banks, UCBs, and NBFCs, with asset size of Rs 15,000 crore and above as at the end of previous year, the statutory audit has to be conducted under joint audit of a minimum of two audit firms [Partnership firms/Limited Liability Partnerships/LLPs].

All other entities have to appoint a minimum of one audit firm (Partnership firm/LLPs) for conducting statutory audit. Entities need to ensure that joint auditors are not under the same network of audit firms.

Related Stories

No stories found.
The New Indian Express
www.newindianexpress.com