June 4, 2015CMD of Nationalized Banks
MD of Associate Banks of SBI
Submission of Long Form Audit Report (LFAR) by Concurrent AuditorsIn terms of enclosure 1 of RBI circular DBS.CO.PP.BC.11/11.01.005/2001-2002 dated April 17, 2002 all the banks were advised, inter alia, as under:
LFAR in respect of branch should be addressed by the branch auditors to the Chairman of the bank, concerned with a copy thereof to the Central Statutory Auditors.
2. The above matter has been examined in light of Para B (1) (ii) of Guidelines for Appointment of Statutory Auditors in Public Sector Banks hosted on RBI web site (at link http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=946#AN2) which is reproduced below:
In respect of branches below the cut-off point, which are subject to concurrent audit by chartered accountants, henceforth, LFARs and other certifications done earlier by SBAs will now be submitted by the concurrent auditors and such branches may not generally be subject to statutory audit.
3. You are advised that henceforth Concurrent Auditors, who are chartered accountants, of branches below the cut-off point will submit LFAR only to the Chairman of the bank. The banks in turn will consolidate/compile all such LFARs submitted by the Concurrent Auditors and submit to Statutory Central Auditor as an internal document of the bank.
4. Please acknowledge receipt.
27 June 2015
24 December 2014
The following procedure will be followed for appointment statutory branch auditors (SBAs) in public sector banks (PSBs):
(i) The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.( LIST prepared and ready to shoot to RBI)
(ii) The above list will be subjected to scrutiny by RBI for identifying the continuing and rested firms and excluding audit firms against whom adverse remarks/disciplinary proceedings are pending or who have been denied audit.
(iii) RBI will, thereafter, forward the final list of all eligible auditors/audit firms to PSBs for selection.
(iv) The PSBs will select the required number of branch auditors/audit firms. Banks will be required to clearly advise the audit firms selected for consideration of appointment that each audit firm can take up audit assignment (branch audit) in one PSB only. The audit firm should give their consent in writing for consideration of appointment in the bank concerned for the particular year and the subsequent continuing years.( the firms whose four year term has not completed shall be on the panel of sam bank.no fresh consent shall be require)
(v) The consent given by an audit firm will be treated as irrevocable and request, if any, from audit firms for changing the bank, after giving its consent to the bank concerned will not be entertained.( some of the banks takes consent from auditor and dont carry their names to list.auditors ignore the other bank offer being consent given .Attention is required for such exercise)
(vi) After the selection of branch auditors, PSBs will be required to recommend the names of both continuing and selected branch auditors to RBI for seeking its prior approval before their actual appointment, as per statutory requirement.
3. SBAs will have a maximum tenure of four years. The appointment of SBAs will be made on an annual basis, subject to their fulfilling the eligibility norms prescribed by RBI from time to time and also subject to their suitability.
4. The number of eligible auditors / audit firms is more than the number of branches to be audited at the following 33 centres (viz. Mumbai, Kolhapur, Pune, Solapur, Thane, Kolkata, Chennai, Coimbatore, Delhi/ New Delhi, Ajmer, Bikaner, Jaipur, Kota, Udaipur, Ahmedabad, Vadodara, Surat, Hyderabad, Chandigarh, Raipur, Faridabad, Gurgaon, Panchkula, Panipat, Sonipat, Bangalore, Ernakulam, Indore, Nagpur, Ludhiana, Jodhpur, Bhilwara, and Ghaziabad). In such centres, the auditors/ audit firms will be put to a period of compulsory rest for two years after completion of four years of continuous branch audit. In other centres, where the number of eligible auditors / audit firms is less than the number of branches to be audited, the branch auditors on completion of four years of continuous branch audit will be subjected to the policy of rotation.(as per policy the other places are out of rotation but the same is being misused)
5. While allotting branches, banks are required to select auditors/audit firms which are in close proximity to their offices/branches. Banks are also required to have a suitable mix of various categories of auditors / audit firms while selecting the branch auditors keeping in view the size of the branches to be audited.( Though banks have nothing to do with the cooling of firms other than 33 places but the same is being implemented from last four years as CAs are in surplus .Though this year PDC has prescribed a list with gap)
6. As regards statutory branch audit to be carried out by SCAs, banks will allot the top 20 branches(to be selected strictly in order of the level of outstanding advances) in such a manner as to cover a minimum of 15% of total gross advances of the bank by SCAs.
19 December 2014
- MEF60001 onwards
15 November 2014
02 July 2014
16 May 2014
15 May 2014
04 April 2014
21 March 2014
01 March 2014
09 November 2013
|Based on the recommendations of a Working Group (WG) to review the norms for empanelment of statutory auditors for public sector banks and other related issues and after seeking the approval of GoI, it has been decided to revise the guidelines on appointment of statutory auditors in public sector banks with effect from the year 2013-14. The revised eligibility norms for empanelment of SCAs as prescribed by RBI in consultation with the WG have been indicated in Annex 1. The categorization/eligibility norms for empanelment of branch auditors which have been kept unchanged are indicated in Annex 2. |
The guidelines/instructions relating to the selection procedure to be followed for appointment of statutory auditors in PSBs and details thereof are furnished in Annex 3
03 July 2013
27 June 2013
Up to 10 crore-Rs. 40,250/-
Above 10 crore up to 20 crore- Rs. 57,500/-
Above 20 crore up to 30 crore- Rs. 79,350/-
Above 30 crore up to 50 crore- Rs. 1,20,750/-
Above 50 crore up to 75 crore- Rs. 1,38,000/-.
30 May 2013
of Public Sector Banks applicable from the year 2013-14
` 1.80 lakh in a year (` 15000/- per month)
` 3.00 lakh in a year (` 25000/- per month)
` 1.20 lakh in a year (` 10000/- per month)
` 1.80 lakh in a year (` 15000/- per month)
Firms having more than 14 partners
Firms having 10 to 14 partners
Firms having 5 to 9 partners
Firms having less than 5 partners
@Total compensation =Sum total of share of profit, remuneration and interest on capital.
No. of CAs exclusively associated with the firm
No. of partners exclusively associated with the firm (full time) (Out of 2)
Bank audit experience
Standing of the audit firm
The firm or at least one of the partners should have a minimum of 8 years experience of branch audit of a nationalised bank and/ or of a private sector bank .
The firm or at least one of the partners should have preferably conducted branch audit of a nationalised bank or of a private sector bank.
(for the firm or at least one partner)
The firm or at least one of the CAs should have preferably conducted branch audit of a nationalised bank or of a private sector bank for at least 3 years
(for the firm or at least one partner)
Even proprietorship concern without bank audit experience may be considered as hitherto. (The proprietary concerns of Chartered Accountants with 1 paid CA, 2 professional staff and not having any statutory branch audit experience of a nationalised bank or of a private sector bank will be treated at par with the partnership firm after deducting their 3 years seniority from the date of their establishment).
STATUTORY AUDITORS IN PUBLIC SECTOR BANKS
- After receipt of the list of eligible auditors / audit firms, based on the eligibility norms for empanelment of auditors / audit firms prescribed by RBI from the Office of the Comptroller and Auditor General of India (C&AG), verification of eligibility of audit firms by RBI with respect to their bank audit experience available with RBI will be done by RBI.
- List of eligible firms after excluding the firms which are to be continued, rested and denied audit during the relevant year will be prepared by RBI and forwarded to GoI for selection by the Selection Committee.
- After selection, GoI will advise bank-wise names of the selected firms to the respective banks. As per the statutory requirement, banks, in turn, are required to forward the names of the selected SCAS to RBI for its prior approval before their actual appointment.
- For the year 2012-13, statutory branch audit of PSBs may be carried out for all branches with advances of ` 20 crore & above and 1/5th of the remaining branches covering a representative cross section of rural/semi-urban/urban and metropolitan branches, predominantly including branches which are not subjected to concurrent audit, so as to cover 90% of advances of a bank. CPUs/LPUs/and other centralized hubs by whatever nomenclature called would be included in the one fifth of the remaining branches every year.
- In respect of branches below the cut-off point, which are subject to concurrent audit by chartered accountants, henceforth, LFARs and other certifications done earlier by SBAs will now be submitted by the concurrent auditors and such branches may not generally be subject to statutory audit.
- Going forward, in mutual discussions with GoI and SCAs, based, inter alia, on the operational efficiency and robustness of CBS, system driven identification of NPAs, and integrity of MIS, managements of individual PSBs may decide on the threshold level of advances for the purpose of selecting branches for statutory audit.
- Progressively, the threshold level of advances may be increased so that the number of branches to be taken up for statutory audit is phased down over a period of time.
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