RBI will name statutory auditors for PSU banks this year too
December, 13th 2007
The Reserve Bank of India will continue to appoint statutory auditors for public sector banks for the current fiscal year and held discussions recently with the Institute of Chartered Accountants of India (ICAI).
There were some doubts about empanelling of statutory auditors this year as some banks have been demanding autonomy in the appointments. In our recent meeting with the RBI officials, it has been finalised that the apex bank will continue the earlier practice of appointing statutory auditors for the current year as well, Mr Sunil Talati, President, ICAI, told Business Line here recently.
Generally, the ICAI would send a list of CAs to the RBI to be appointed as statutory auditors. The RBI would in turn send a list to the PSUs from which they can appoint statutory auditors. However, for the last two years, some banks feel that this is against the principle of autonomy, Mr Talati said. The ICAI has already indicated to its members that this practice might not continue. There is no guarantee that this practice will be continued in future, Mr Talati said.
On the merits of the systems, Mr Talati said it had both advantages and disadvantages. From a CAs point of view, it augurs well for their practice.
There are mixed opinions among the bankers. We have now complete autonomy in appointing internal auditors. But when a statutory auditor is appointed by the RBI, he would come with a mandate and an air of superiority, a senior official of Andhra Bank said.
However, Mr Amitabha Guha, Managing Director, State Bank of Hyderabad, said the system was functioning well. The RBI selects the auditors after a vigorous screening and a bank can always go back to it if it has any objections in accepting a particular auditor. Why to disturb the system when it is functioning well? he questioned.