The Reserve Bank of India (RBI) has revised norms for concurrent audit in banks and mandated lenders should ensure that risk-sensitive areas identified by them are covered under the audit.
Concurrent audit aims at shortening the interval between a transaction and its independent examination.
“Care may be taken to ensure that all centralized processing centres (business origination and monitoring) are covered under concurrent audit,” the RBI said.
With regard to appointment of auditors, it has been left to banks whether concurrent audit should be done by bank's own staff or external auditors.
“The head of internal audit in the bank should participate in selection of concurrent auditors where such function is outsourced and should be responsible for the quality review of the work of the concurrent auditors reporting to her/him,” RBI said adding that banks should ensure if any partner of a chartered accountant firm is a director of the bank, no partner of the same firm should be appointed as concurrent auditor in the same bank.
The RBI said the tenure of external concurrent auditors with a bank should not be more than five years on continuous basis. The age limit for retired staff engaged as concurrent auditors has been capped at 70 years.
“No concurrent auditor shall be allowed to continue with a branch/business unit for a period of more than three years,” the RBI said.
