: Tuesday, April 27, 2021, 6:29 PM IST
RBI issues guidelines on the appointment of auditors: Banks, UCBs, NBFCs with an asset size of more than Rs 15,000 crore will have two auditors
Reserve Bank of India (RBI)
Photo Credit: PTI
Banks, Regional Rural Banks (RRBs), Urban Cooperative Banks (UCBs), and Non-Banking Finance Companies (NBFCs) with an asset size of Rs 15,000 crore and above, will need to appoint two audit firms, said Reserve Bank of India (RBI).
RBI stated that the guidelines shall become applicable from FY 2021-22 and onwards. However, UCBs and NBFCs shall have the flexibility to adopt these guidelines from H2 of FY 2021-22 so that there is no disruption.
1
The Reserve Bank of India (RBI) has issued a circular on risk-based internal audit (RBIA) for non-banking finance companies (NBFC) and urban cooperative banks (UCB) so as to provide them with the essential requirements for a robust internal audit function, including sufficient authority, stature, independence, resources, and professional competence at par with scheduled commercial banks (SCBs).
The circular covers all deposit-taking and non-deposit-taking NBFCs, including core investment companies, with asset size of Rs5,000 crore and above, and all primary (urban) cooperative banks (UCBs) with asset size of Rs500 crore and above.
According to RBI, while NBFCs and primary UCBs have grown and become systemically important, the prevalence of different audit systems or approaches in such entities has created certain inconsistencies, risks, and gaps.
Updated Feb 03, 2021 | 16:37 IST
Currently, all the entities supervised by the RBI have their own approaches on internal audit, resulting in certain inconsistencies, risks and gaps in the system, the RBI said RBI unveils risk-based internal audit guidelines for select NBFCs, urban co-op banks | Photo Credit: PTI
New Delhi: The Reserve Bank of India (RBI) on Wednesday unveiled the risk-based internal audit (RBIA) system for select non-bank lenders and urban co-operative banks, with a view to enhance the quality and effectiveness of their internal audit system.
RBI had announced in the ‘Statement on Developmental and Regulatory Policies’ issued as part of the Monetary Policy Statement dated December 4, 2020 that with a view to strengthen the Internal Audit Function, which works as a third line of defence, suitable guidelines will be issued to large UCBs and NBFCs on adoption of Risk-Based Internal Audit (RBIA).
RBI issues circular on risk-based internal audit for UCBs, NBFCs
The circular is applicable to NBFCs with asset size of Rs 5,000 crore and all Primary Urban Cooperative Banks (UCBs) with asset size of Rs 500 crore and above February 03, 2021 / 10:42 AM IST
The Reserve Bank of India (RBI) on February 3 issued a circular on risk-based internal audit for Non-banking finance companies (NBFCs) and Urban Cooperative Banks (UCBs) on risk-based internal audit.
The circular is applicable to NBFCs with asset size of Rs 5,000 crore and above and all Primary Urban Cooperative Banks (UCBs) with asset size of Rs 500 crore and above, RBI said.