RBI issues Guidelines on Appointment / Re-appointment of Statutory Auditors of State Co-operative Banks and Central Co-operative Banks
RBI has issued guidelines on Appointment/Re-appointment of Statutory Auditors of Co-operative Banks. The guidelines shall come into effect from April 1, 2024.
State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs) are required to obtain prior approval of Reserve Bank of India (RBI) for appointment, re-appointment or removal of Statutory Auditor (SA).
Eligibility Criteria of Statutory Auditors (SAs) – In case of appointment of fresh SA, the bank shall select from the list provided by NABARD the audit firms fulfilling the requirements under these guidelines based on asset size viz-a-viz size of chartered accountants firm and audit experience and forward the name(s) of the shortlisted audit firms to RBI as per the following procedure:
(i) It shall send the application to RBI with the names of the audit firm as approved by its Board / ACB, followed by grant of prior approval by RBI and concludes with the appointment of SA in the AGM of the concerned bank.
(ii) In case of fresh appointment of SA, for each vacancy of SA, the bank shall shortlist minimum of two audit firms from the panel of NABARD.
(iii) The bank shall place the names of shortlisted audit firms, in order of preference, before their Board / ACB for ‘in principle’ approval. After approval of the Board / ACB, the bank shall approach RBI for prior approval.
(iv) The banks having their Registered Office within Mumbai Region shall submit their application to the Audit Relation Group (ARG), Department of Supervision (DoS), Central Office (CO), RBI, Mumbai. Banks under the jurisdiction of Nagpur Office of RBI shall submit their application to DoS, RBI, Nagpur. The banks in other States / UTs shall submit their application to DoS of the respective Regional Office of RBI in the state where the Registered Office of the bank is located.
(v) The bank shall obtain a certificate, from the shortlisted audit firms to the effect that the audit firm complies with all the eligibility norms prescribed by RBI.
(vi) While recommending the name(s) of audit firm(s), the bank shall also furnish a certificate stating that the audit firm proposed to be appointed as SA by it comply with all the eligibility norms prescribed by RBI.
(vii) While approaching RBI for prior approval, the bank shall indicate its total asset size as on March 31st of the previous financial year (audited figures), attach a copy of Board / ACB Resolution recommending name(s) of audit firm(s) in the order of preference.
Tenure and Rotation of Statutory Auditors (SAs) – SAs shall be appointed at a time for a period of one year only and shall be reappointed annually for the succeeding two years subject to them continuing to satisfy eligibility norms. An auditor / audit firm shall not be eligible for appointment / re-appointment in the same bank for six years (two tenures) immediately after completion of a full or part tenure.
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