RBI freezes branch audit threshold at 20cr, 40% reduction likely!!!
Just
spoke to our ICAI Past President and good friend Amarjit Chopra ji, who
is also on the Board of Directors of Indian Bank.. he has confirmed
that the RBI has sent letters to PSU banks informing them of 20cr
threshold! So here is what RBI instruction says:
Bank Branches with 20cr+ advances - all such branches to be audited
Branches with less than 20cr advances - 1/5 th of such branches to be audited
Had
a talk with a CA associated with this process.. he says in case of one
PSU Bank, where roughly 2000 branches were audited last year, only 1200
odd would be audited this year.. which means a straight 40% reduction!
Most impacted will be rural branches, am assuming. Allotments should be
completed by Jan 31st as per my info. This is a big big blow to many CAs
who depend on bank audit as a major chunk of their annual income. But
the RBI Governor had given a big hint that this was coming.... in his
address to CAs at WIRC Regional Conference in Dec 2011! Tough times
beckon...