Reserve Bank of India has introduced provisional changes in the guidelines for the Statutory Bank Audit of Public Sector Bank for Financial Yer 2019-20 due to COVID-19 crises.
Laws related to eligibility, empanelment and appointment of Statutory Branch Auditors of Public Sector Banks will be applied among others that states, ‘Statutory branch audit of Public Sector Banks shall be carried on for all the branches with Advances of ₹ 20 crores & above and 1/5th of the remaining branches covering a representative cross-section of rural/semiurban/urban and metropolitan branches, predominantly including branches which are not subjected to concurrent audit, so as to cover 90% of advances of a bank. CPUs/LPUs/and other centralized hubs by whatever nomenclature called would be included in the one-fifth of the remaining branches every year’
RBI amid special circumstances has come up with the provisional laws regarding the conduct of the statutory audit. As per the modified norms, Statutory branch audit for the Public Sector Banks shall be carried on for the banks that cover 90% of all the funded and 90% of all the non-funded exposures of the bank.
Read Also : RBI : FAQs on Moratorium of EMI for Three Months
Here the banks must ensure that the branch and centralized hub they are selecting for statutory audit shall have the representative cross-section of its rural/semi-urban/urban and metropolitan branches, including branches that are not subjected to concurrent audit.”
The change is expected to give some flexibility to the banks by reducing the number of branches to be audited while conducting a full-fledged investigation of the business coverage of the banks.
For banks where the branch audit for Y 2019-20 has already been done abiding by the provisional norms, the relief in the coverage (as needed) could be utilized so as to counter the discrepancies caused due to COVID-19 outbreak in the country.
Paying heed to the constantly increasing COVID 19 crises and nationwide lockdown, the public sector banks will have to ensure the safety of the auditors and other bank officials that are concerned with the audit process. This could be done by providing the complete documents, details to the auditors via electronic sources as far as it is convenient and promote minimum physical movement/visits by selecting wisely the location of branches.
Public Banks that are encountering any issue related to the conduct of audit or if the branch auditor (due to any reason) is unable to conduct the audit, can approach RBI with the demand for a third-party audit firm. PSB can select from the list of recommended audit firms created by RBI.
Due date for presenting the branch allocation details to RBI has been shifted from earlier 30 April 2020 to current 15 June 2020.
Contact Us
