Internal Assignments in Banks by Statutory Auditors :
1.05 The RBI, vide its circular no. Ref.DBS.ARS.No. BC. 02/ 08.91.001/ 2008-09 dated December 31, 2008 on “Internal assignments in banks by statutory auditors”, decided that the audit firms should not undertake statutory audit assignment while they are associated with internal assignments in the bank during the same year. In case the firms are associated with internal assignment it should be ensured that they relinquish the internal assignment before accepting the statutory audit assignment during the year.
1.06 As the central auditors for private banks are appointed every year by their shareholders in the Annual General Meetings (AGM), each bank is required to obtain prior approval of the RBI in terms of the provisions of Section 30(1A) of the Banking Regulation Act, 1949 before making appointment/re-appointment of the auditors.