Mumbai: The Reserve Bank of India has revised the norms of concurrent audit of banks whereby the apex bank has capped the term for concurrent auditors at three years.
The concurrent audit system aims at shortening the interval between a transaction and its independent examination.
"The age limit for retired staff engaged as concurrent auditors may be capped at 70 years. However, no concurrent auditor shall be allowed to continue with a branch or business unit for a period of more than three years," RBI said in a notification on Thursday.
It has also said that banks' internal audit department should develop a reporting system for concurrent auditors with the approval of Audit Committee of the Board of Directors (ACB) or Local Management Committee (LMC).
The findings of the concurrent auditors may be received in a structured format prescribed by the bank. Minor irregularities pointed out by the concurrent auditors shall be rectified on the spot. The major deficiencies or aberrations noticed during the audit should be immediately brought to the notice of the head office or controlling office of the concerned branch or business unit of the bank, it said.
"If external firms are appointed and any serious acts of omission or commission are noticed in their working, their appointments may be cancelled after giving them reasonable opportunity to be heard and the fact shall be reported to Audit Committee of the Board of directors (ACB) / (LMC) Local Management Committee of the bank, RBI and ICAI," said the notification.
The apex bank further said that the bank should frame a policy for fixing accountability in cases of serious acts of omission or commission noticed in the working of a bank's own staff or retired staff, working as concurrent auditors.
Read More: Oil crisis to have a limited impact on inflation: RBI Governor
