Cobrapost impact: bank audits set to get tougher

The Reserve Bank of India (RBI) and the government could look at reinstating audit system even in “smaller” branches with advances below Rs 20 crore following rampant violation of know your customer (KYC) norms by banks revealed by investigative website Cobrapost. Mahua Venkatesh reports.

The Reserve Bank of India (RBI) and the government could look at reinstating audit system even in “smaller” branches with advances below Rs 20 crore following rampant violation of know your customer (KYC) norms by banks revealed by investigative website Cobrapost.

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Large number of bank branches went unaudited in the previous fiscal year (2012-13) after the government issued a directive stating that only branches with advances upward of Rs 20 crore would be scrutinised by auditors and chartered accountants. Until 2012, bank branches with advances of Rs 6 crore were exempted from audits.

The Institute of Chartered Accountants of India (ICAI) has taken up the issue both with the government and the RBI.

“We have taken up the issue and we would again take it up, it is important to bring as many branches possible under the audit fold to ensure that norms have been adhered to, it acts as a deterrent,” Subodh Kumar Agrawal, president, ICAI told HT.

“We would do the needful and a decision would be taken soon," a senior RBI official told HT.