Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 ITAT Cuts ?4.85 Lakh Penalty After ?14.02 Lakh Interest Income Was Missed in ITR
 ITR filed under old regime, tax calculated under new regime; Delhi ITAT gives taxpayer relief
 ITAT Delhi Quashes Tax Notice on AMU PG Student’s ?18.34 Lakh Stipend, Declares It Tax-Free Under Section 10(16)
 Advance tax deadline September 15: What happens if you missed the previous instalment payment?
 How much gold jewellery can you keep at home? Nagpur ITAT explains rules on ownership, gifts, taxability
 ?5.31 lakh TDS refund allowed by ITAT Delhi: Why absence of an original ITR did not block the taxpayer
 Missed the ITR Filing Deadline? How to Claim Your Income Tax Refund and Correct Mistakes Before December 31, 2026
 GST Return Preparation & ITC Analysis with TallyPrime (Hinglish Session)
 GST Return Preparation & ITC Analysis with TallyPrime (Hinglish Session)
 GST Return Preparation & ITC Analysis with TallyPrime (Hinglish Session)
 Income-Tax Department Moves to Bring Greater Certainty to International Tax Cases

ICAI unhappy with move to relax audit norms
March, 14th 2007

The Institute of Chartered Accountants of India has taken up cudgels with the Reserve Bank of India after the banking regulator relaxed norms and spared bank branches with less than Rs 5 crore business from compulsory audit.

The RBI move has huge ramifications for accounting and audit firms in India and adversely affects their business. Almost 35-40% of CA firms, especially the smaller ones, will be hit by the RBI directive, said the ICAI president Sunil H Talati.
 
Consider this: there are as many as 70,000 bank branches in India. Of this, less than 2,000 branches account for two-thirds of the total business. And as many as 35,000-40,000 branches have a business of less than Rs 5 crore, which would mean a hit of nearly Rs 400 crore to CA professionals, considering that the average cost for audit per such brand was around Rs 1,00,000.

It leaves the banking system open to malpractices and frauds. This is a dangerous situation, Talati said. He rued the RBI did not even consult the institute, which regulates the audit function in India. While the ICAI has already written to the banking regulator about its arbitrary decision and its adverse fallout on the banking industry, he said the matter was also being discussed at the institutes ongoing central council meeting.

The RBI had recently informed public sector banks that branches with advances of up to Rs 5 crore and more need not be audited as against the earlier threshold of Rs 1 crore. Branch audits ensure that there is a check on interest expenditure, a control over cash, cheque books, etc, Talati said.

He said it would be improper if the audit exemption was carried forward. The concept is incorrect as in many branches, the advances are less but deposits are substantially more. What control and audit would you have in such situations, he questioned.

The relaxation has, however, been welcomed by bankers, who said it would lead to faster finalisation of accounts and help in controlling costs. It is a welcome step and will help banks finalise their accounts within a reasonable time-frame, United Bank of India CMD P K Gupta said.

He added that it would increase the efficiency of the banking system.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2026 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting