Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: 4.8
Article rating: 5.0
Article rating: 3.0
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: 4.5
Article rating: No rating
Article rating: No rating
Article rating: 4.2
Article rating: 5.0
Article rating: 4.0
Article rating: No rating
Article rating: No rating


Auditors blame govt for bank scam

Author: IANS/Monday, March 5, 2018/Categories: Banking & Financial Services

Auditors blame govt for bank scam

Kolkata - In the wake of an alleged multi-crore fraud on state-run Punjab National Bank (PNB), the auditors and financial professionals on Saturday accused the central government of "diluting the bank audit system as well as power of Reserve Bank of India (RBI) for selection of auditors for auditing of banks".

They also questioned how the management of banks are allowed to select the statutory auditors.

"Earlier, the RBI used to appoint statutory auditors of banks. But to our utter surprise, we observed that from 2014-15, the power of the RBI to appoint central statutory auditors and branch statutory auditors was snatched by the central government and was handed over to the management of the respective banks," Association of Chartered Accountants' General Secretary Kingsuk Datta told reporters here.

Forum of Finance Professionals and Economists' General Secretary Sunil Kumar Gandhi said banks' managements were allowed to select the statutory auditors taking only nominal permission of the RBI before the appointment.

"Can you imagine a situation where the examinees themselves are appointing their own examiners," he asked.

They demanded the selection of bank central auditors and statutory branch auditors should be done under the control of the RBI and not in the hands of the bank management.

The association and forum also demanded the creation of a national audit board which will act as a regulatory body for appointment of auditors of private listed companies, parallel to C&AG.

They also apprehended there might be a "nexus" between the management of a particular bank and selected auditors' of the lender if the selection process continues in this way.

Criticising the Ministry of Finance's circular dated September 26, 2012, Datta also said the Ministry of Finance directed banks that "the statutory branch audit has become routine and not much effective post implementation of CBS (core banking solution) in PSBs (public sector banks)".

"Statutory branch audit is essential and unfortunately, branches with advances of Rs 20 crore or below are not selected for statutory audit," Datta said.

In view of the alleged multi-crore bank fraud case, Gandhi said keeping "Swift" out of the core banking solution was "one of the loopholes".

Both the association and forum demanded the scrapping of the FRDI Bill, 2017.

Print Rate this article:
No rating

Number of views (128)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free