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Ann. 2.1 – Policy of Empanelment of CA Firms/LLPs and Selection of Auditors

audit by any other/associate audit firm under the same fees of SCAs/SAs.
network of audit firms is not permissible. The incoming
audit firm shall not be eligible if such audit firm is 10. Statutory Audit Policy and Appointment Procedure
associated with the outgoing auditor or audit firm under
the same network of audit firms. 10.1 Each Entity shall formulate a Board/LMC Approved Policy
to be hosted on its official website/public domain and
9. Audit Fees and Expenses formulate necessary procedure thereunder to be followed
for appointment of SCAs/SAs. Apart from conforming to
9.1 The audit fees for SCAs/SAs of all the Entities shall all relevant statutory/regulatory requirements in addition
be decided in terms of the relevant statutory/regulatory to these instructions, this should afford necessary
provisions. Public Sector Banks will continue to be transparency and objectivity for most key aspects of this
guided by relevant RBI instructions in the matter. important assurance function.
9.2 The audit fees for SCAs/SAs of all the Entities shall 10.2 Guidelines on minimum procedural requirements are
be reasonable and commensurate with the scope and given at Annex II.
coverage of audit, size and spread of assets, accounting
and administrative units, complexity of transactions, level Yours faithfully,
of computerization, identified risks in financial reporting, (Ajay Kumar Choudhary)
etc.
Chief General Manager-In-Charge
9.3 The Board/ACB/LMC of Entities shall make
recommendation to the competent authority as per the FAQs - Guidelines for Appointment of Statutory Central
relevant statutory/regulatory instructions for fixing audit Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks
(excluding RRBs), UCBs and NBFCs (including HFCs)

ANNEX I
ELIGIBILITY CRITERIA FOR APPOINTMENT AS SCA/SA

A. Basic Eligibility

Asset Size of Minimum No. of Out of total FTPs, Minimum No. Minimum No. of Minimum No. of
Entity as on 31st Full-Time partners Minimum No. of of Full Time years of Audit Professional staff
March of Previous (FTPs) associated Fellow Chartered Partners/ Paid Experience of the Note 4
Year with the firm for a Accountant CAs with CISA/ firm Note 3
period of at least (FCA) Partners ISA Qualification
three (3) years associated with Note 2
the firm for a
Note 1 period of at least
three (3) years
Above ₹15,000 5 4 2 15 18
crore
Above ₹ 1,000 3 2 1 8 12
crore and Up to
₹15,000 crore
Upto ₹1,000 crore 2 1 1* 6 8

* Not mandatory for UCBs/NBFCs with asset size of upto ₹ 1,000 crore.
Note 1: There should be at least one-year continuous association of partners with the firm as on the date of empanelment (for
PSBs)/ shortlisting (for other Entities) for considering them as full time partners. Further, for appointment as SCAs/SAs of all
Commercial Banks (excluding RRBs), and other Entities with asset size above ₹ 1,000 crore, at least two partners of the firm shall
have continuous association with the firm for at least 10 years.
For all Commercial Banks (excluding RRBs), and UCBs/NBFCs with asset size above ₹ 1,000 crore, the full-time partner’s
association with the firm would mean exclusive association. The definition of ‘exclusive association’ will be based on the following
criteria:
(a) The full-time partner should not be a partner in other firm/s.

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