Page 128 - Quick Insights Book 2022

Ann. 2.2 – Norms on eligibility, empanelment and appointment of Statutory Branch Auditors in Public Sector Banks ...

size of the branches to be audited. Banks are advised be appointed as a central/branch auditor of only one
to allot branches, to the extent possible, to the audit PSB during a particular year.
firms taking into consideration their category and audit
experience in such a way that specialised and larger 9. In order to protect the independence of the auditors/
branches are audited by bigger/experienced audit firms. audit firms, banks will have to make the appointments
of branch auditors for a continuous period of four years
6. As regards statutory branch audit to be carried out subject to the firms satisfying the eligibility norms each
by SCAs, banks will allot the top 20 branches (to be year. Banks cannot remove the audit firms during the
selected strictly in order of the level of outstanding above period without the prior approval of the Reserve
advances) in such a manner as to cover a minimum of Bank of India.
15% of total gross advances of the bank by SCAs.
10. The firms whose partner/s are on the Boards of PSBs
7. All PSBs are required to have a Board approved policy for are not to be appointed as auditors of the same PSB.
appointment of statutory auditors and the same shall be
hosted on the bank’s website. Banks are also required to 11. The audit firms retiring as Statutory Central Auditors from
ensure that the policy framed by the Board in the matter of a PSB shall not be eligible to be appointed as SBAs of
selection of auditors/audit firms for appointment of auditors the same PSB during the prescribed cooling period for
is strictly adhered to. Further, the list of firms selected for SCAs from that particular PSB.
appointment as statutory branch auditors shall be placed
before the ACB/Board of bank for its concurrence before D. Eligibility norms for the empanelment of audit firms
it is forwarded to RBI for final approval. to be appointed as Statutory Branch Auditors in
PSBs
8. The policy of one audit firm for one PSB will be
continued. Accordingly, an audit firm will be eligible to 12. The eligibility norms are given in the Annex.

ANNEX
ELIGIBILITY NORMS FOR THE EMPANELMENT OF AUDIT FIRMS TO BE APPOINTED
AS STATUTORY BRANCH AUDITORS FOR PUBLIC SECTOR BANKS (2020-21 ONWARDS)
Category No. of CAs No. of partners Professional Bank audit experience Standing
exclusively exclusively staff* of the audit
associated* with associated*with firm*
the firm (Full time) the firm (full time)
(Out of 2)
(1) (2) (3) (4) (5) (6)
I. 5 3 8 The firm or at least one of the partners 8 years
should have a minimum of 8 years
experience of branch audit of a
nationalised bank and/ or of a private
sector bank.
II. 3 2 6 The firm or at least one of the partners 6 years (for
should have preferably conducted branch the firm or
audit of a nationalised bank or of a at least one
private sector bank for at least 5 years. partner)
III. 2 1 4 The firm or at least one of the CAs 5 years (for
should have preferably conducted branch the firm or
audit of a nationalised bank or of a at least one
private sector bank for at least 3 years partner)
IV. 2 2 2 Not necessary 3 years

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