RBI not instructed banks to require CA certificate on unaudited Financial Statements

RBI has not instructed banks to require CA certificate on unaudited Financial Statements or certify identity and address of a loanee.

Reserve Bank of India, reply to an application filed by CA Pranav Pramod Ashtikar under Right to information Act (RTI) 2005, has clarified about banks/financial institutions requiring CA certificate or attestation on unaudited Financial Statements of a customer applying for a loan.

According to RBI, it has not issued any specific instructions/circular to the Banks or Financial Institutions making it mandatory to obtain signature / attestation / certificate of a Chartered Accountant in practice on unaudited Financial Statements of a customer who has applied for availing the services of Bank or Financial Institution. However, it has been clarified that credit related issues have been mostly deregulated and RBI has advised banks to have documents of investment policy, loan policy, loan recovery policy etc. prepared and duly vetted by their Boards of Directors. Banks are required to take credit related decisions based on Board approved policies and broad regulatory guidelines as well as the statutory provisions.

Further, a loan is subject to the terms and conditions of loan agreement between the borrower and the lender.

Further, RBI has also stated that it has not issued any specific instructions/circular requiring attestation / certificate from a Chartered Accountant in practice confirming the identity & address of the customer is mandatory / recommendatory for availing banking facilities.

Also, in reply to the specific query as to whether RBI has directed Banks & Financial Institutions to seek login IDs & passwords of Income Tax & GST Portals of Customers while processing the Loan Applications of Customers for verification of financial statements & other records submitted by customers at the time of furnishing application of availment of loans, the RBI has clarified that it has not issued any specific instructions in this regard.

However, the RBI has made a reference to its Master Circulars on the subjects for more information.

• FDCM invites application for empanelment of practising CAs/ Chartered Accountant Firms
• PGRI invites application for CAs for empanelment for Circulation Verification work
• CBDT notifies revised Form for registration as valuer & authorised income tax practitioner
• Curtailing time to file reply to notice u/s 148A(b) from 30 days prejudiced assessee’s right – HC
• For registration u/s 12AB, applicability of proviso to section 2(15) can’t be adjudicated