In a relook at the banking system in India which has grown enormously over the years and variety of products and services provided by the banks based on latest technology, RBI has revised its guidelines on the scope and coverage of Concurrent Audit System in banking sector.
In a communiqué dated July 16, 2015, with regard to appointment of auditors and accountability, the regulator said that the banks are left with the discretion to decide whether the concurrent audit of the bank should be done by bank’s own staff or external auditors including retired staff of the same bank. The communiqué further said that if the bank engages its own staff, they should be experienced; well trained and sufficiently senior and such staff must be independent of the branch where concurrent audit is conducted.
The new guideline suggests, the branches selected for concurrent audit should be on the basis of high- risk profile of the branch irrespective of the size of the business. All Specialized branches like Agriculture, SME, Large Corporate, Mid Corporate, Retail Assets, Portfolio Management, Treasury, Forex, Back Office, Exceptionally large branch, Very Large Branch etc., are covered under Concurrent audit system. However, as per new guidelines, certain low- risk areas on account of computerization/core banking system may be excluded from the purview of the concurrent audit.
The remuneration package for appointment of concurrent auditors are under the discretion of individual banks which depends upon factors such as coverage of areas, quality of work expected, number of people required for the job, number of hours to be spent on the job etc.