NABARD undertakes the entire
exercise of identifying suitable audit firms for
appointment as auditors in RRBs .Terms and conditions of such appointed
auditors are also recommended by NABARD after an approval from the finance
ministry. There is
a standing advisory committee which approves the list of Audit Firms for undertaking Statutory as well as Branch
Audit of nationalized Commercial Banks, Financial Institutions and RRBs. RBI is
the convener of this Committee and GM, NABARD is a member of the committee.
On January 20, 2015
, The ICAI has submitted Bank Branch
Auditors’ Panel for the year 2014-15 containing the eligible members/firms
submitted to NABARD. 18th January, 2015. Thereupon A meeting was held with the
officials of Institutional Development Department of NABARD to discuss the
matters of mutual professional interest and finally a representation was
submitted to Shri Harish Java, Chief General Manager, IDD, NABARAD requesting
them to increase the fees paid to auditors of RRBs on 8th April, 2015. The same representation dated
November 11, 2009 was sent to Shri G.
C. Panigrahi, Chief General
Manager regarding revision in the fees of auditors of Regional Rural Banks.
After a lapse of considerable time for the
year end there is no movement to undertake the audits. The list sent by NABARD
to the finance ministry is yet to take its final shape and necessary approvals
are still required to knock that. The RRBs balance Sheets have to be compiled
with their sponsor banks so the delay shall have
Earlier, the Government has approved the revised norms for empanelment
of Statutory Auditors in RRBs in the year 2011-12. Till date there is no revision
hence the following shall be applicable for 2014-15.
The revised Criteria for allocation of Statutory Auditors of RRBs in
2012 were as follows.
1. Category
I & II may be drafted for large scale amalgamated RRBs.
2. For
Standalone RRBs Statutory Auditors may be drawn from Category II & III.
3. In
the case of non availability of Category I, II & III , auditors may be drafted from Category IV
4. Sole
Proprietors firms may not be considered for statutory audit of RRBs.
5. Threshold
Limit of advances is raised from existing Rs. 50 Lacs to Rs. 1 Crore while
making selection of branches of RRBs for statutory audit.
6. This
has the approval of Finance Minister.
Earlier
Criteria for allocation of Statutory Auditors of RRBs was first approved in
2009 Dated (10.08.2009) as follows.
1. New
firms to be empanelled from the list of audit firms who’s Chartered Accountant
should have Diploma in Information and System Accounting (DISA) qualification.
2. Selection
for new audit firms to be made only from category III and from category IV SP
upto 20% of the total requirement in respect of vacancies.
3. Re-appointment
of on-going existing audit firms as SCA and SBA if they are in the list of
ICAI.
4. Partnership
firms having a minimum of two Chartered Accountants as partners, of whom at
least one should be a full time partner, and the firm or at least one of the
partners having a minimum of 5 years experience of bank audit
5. Audit
firms that have served as SCA in one RRB consecutively for 3 years to be rested
for two years.
6. Audit
firms that have served as SBA (Statutory Branch Auditor) in one RRB
consecutively for 4 years to be rested for two years.
7. Audit
firms having experience of bank audit not less than 5 years to be considered.
8. A
panel of 2 firms as stand-by for SCA and 2 firms as stand-by for SBA of each of
the RRBs is being prepared and provided to RRBs after GOI approval.
9. Sole
proprietorship firms to be considered as SBA, to the extent of 20% of the total
requirement.
In a
recent past many measures have been taken for Regional Rural Banks by the
Central Govt. & RBI. Now these banks are open to lend to the weaker section
and are permitted to lend to non-target groups. They can also undertake various
types of business such as issuance of guarantees, demand drafts, traveler’s
cheques etc in and outside their service areas. In the wake of these
developments, the audit mechanism also required to be strengthened and from
2009 onwards, the data as maintained for MEF is being sent to NAWARD. The only
difference between the PSU audits and RRBs audits that the audit firms for RRBs
audit are required to have a DISA qualified partner.
No serious efforts have been made
by the PDC to protest for barring all category-IV auditors
and Sole Proprietorship Firms even with experience of more than 20-25 years are
not considered for the appointment as branch auditors of small branches of the RRBs
and no distinction between appointment of Statutory Central
Auditors (SCA) and Statutory Branch Auditors (SBA).
it is always advisable to appoint SCAs
from category-I & II for equal
opportunity and distribution of audit work and SBAs from
category-III, IV & IV SP for equal opportunity and distribution
of audit work . This time there is no equal opportunity and distribution of
audit work particularly category-iv & iv sp. there is no justification to a decision
accepted by the PDC in regular meeting with the NABARD.
A million dollar questions arises
Why small branches in the remotest rural
areas with advances of rs.1 Crore & above cannot be audited by sole
proprietorship?
Why
our regulator failed to understand the reality that professional opportunity
does not knock, it presents itself when you beat down the door?
Thanks & Regards,
CA AMRESH VASHISHT, FCA, LLB, DISA (ICAI)
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