Page 63 - Quick Insights Book 2022

Chap. 15 – Non-Banking Financial Companies (NBFCs)

 Valuation of Financial Assets  A declaration to be furnished by the firm regarding its
interests, if any, in the assisted unit of NBFC (for which
 Valuation of Plant & Machinery due diligence exercise needs to be carried out) in the

 Due Diligence for NBFC capacity of Director/ promoter etc.
 Field investigating agencies  A declaration should be furnished by the firm that credit
facilities availed by the firm or partners or firms in which
 Stock Auditors/ Valuers they are partners or directors including any facility

 Audits like Concurrent Audit, Receivable Audit, Forensic availed by a third party for which the firm or its partners
Audit, Revenue Audit, Audit of National pension scheme. are guarantor/s have not turned or are non- performing
assets, as per the prudential norms of RBI. In case the
CRITERIA USUALLY SET OUT FOR EMPANELMENT declaration is found incorrect, the assignment would get
FOR NBFC terminated besides the firm being liable for any action
under ICAI/RBI guidelines.
 The Firm should possess a valid registration (Firm
constitution Certificate)/from the Institute of Chartered PROFESSIONAL OPPORTUNITIES UNDER THE
Accountants of India. NON-BANKING FINANCE SECTOR

 The Chartered Accountant firm shall have minimum 2  Assist in Application for Registration with Reserve Bank
partners. Details of each partner including experience, of India (RBI) to commence /carry on any business of
qualification etc. and their Membership Number with non-banking financial institution.
Institute of Chartered Accountants of India to be
submitted.  Obtain specific authorization from RBI to accept
deposits from the public and maintain the Liquid Asset
 The CA firm shall have minimum 5 years of relevant Requirement as required by RBI.
experience of certification of Book Debts, monitoring
visits, regulatory certifications required by RBI and other  A wide gamut of legislations is applicable to NBFCs and
regulators, for NBFC-MFIs/ NBFCs/ Banks. assistance may be provided in compliance with them.
 The firm shall have suitable Infrastructural facilities,  Compliance with RBI Directions and Prudential Norms.
including office set up and qualified manpower for  Submission of Annual, Quarterly and Monthly Returns.
carrying out such exercises. The key professional staff Ensure adherence with Know Your Customer Guidelines,
shall have the competence and experience to carry out Fair Practice Code, Corporate Governance Guidelines
the assignment in a time bound manner. etc.
 The firm shall have wide presence preferably across  Issue Certificate as required from Statutory Auditors
States. The preference also be given to Chartered by NBFCs having Foreign Direct Investment (FDI) for
Accountant Firms having presence and operations in the compliance with the RBI Master directions.
States of Uttar Pradesh, Bihar, West Bengal, Odisha,
Karnataka, Madhya Pradesh, Tamil Nadu, Kerala,  Internal Audit.
NCR, Assam, Chhattisgarh, Rajasthan, Maharashtra &  Statutory Audit.
Jharkhand.
 Information Technology Audit
 The firm shall execute undertaking of fidelity and secrecy
on its letterhead in the format prescribed by NBFC.  Tax Audit under Income-tax Act

 The firm shall ensure that the exercise is carried out in  Compliance Audit of various Regulations.
a professional manner and in case of any misconduct &
negligence, NBFC reserves the right to report the matter  Portfolio management
to ICAI/RBI, under the regulation/guidelines issued from  Consultancy & advisory services regarding financial
time-to-time. health of customers with key exposure through
 The CA Firm should not sub-contract the assignment to continuous monitoring and review of such accounts
any other firm/ company/ third party or other persons.

50 Quick Insights on Professional Opportunities for Chartered Accountants