RBI advises PSBs to have fair system for branch auditor appts

The Reserve Bank has advised public sector banks to put in place a fair and transparent mechanism for appointment of statutory branch auditors. Chartered accountants' apex body ICAI has been raising concerns over the selection process followed by public sector banks (PSBs) with respect to auditors for auditing work at their branches. Following its representations, ICAI has said the Reserve Bank of India (RBI) has "advised all PSBs to formulate a fair and transparent policy and procedure in the matter of selection and appointment of statutory branch auditors".

The President of the ICAI (Institute of Chartered Accountants of India) Nilesh S Vikamsey has mentioned about the RBI move in his latest monthly message to members.

Citing the RBI, he said the public sector banks have also been advised to appoint statutory branch auditors with the help of software for parameter-based allocation. "RBI has further advised that the banks may appoint SBAs centrally at corporate office with the help of software for parameter based allocation of audit amongst the eligible firms ..." to select audit firms as per the appointment policy in place, as per the message. While flagging issues related to appointment of auditors of PSBs, the institute had proposed developing a software for fair, transparent and equitable allotment of branch statutory audits. The suggestions were made to ensure that a systematic selection system is in place without manual intervention. There are 21 PSBs in the country.