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Corporate Laws Central Ministry of Finance Banking (Regulation) Act, 1949

Guidelines on Appointment / Re-appointment of Statutory Auditors of State Co-operative Banks and Central Co-operative Banks

15-Jan-2024 | RBI/2023-2024/113 Ref.No.DOS.ARG/SEC.8/08.91.001/2023-24

RBI has issued Guidelines on Appointment / Re-appointment of Statutory Auditors of State Co-operative Banks and Central Co-operative Banks.

By virtue of this circular RBI has framed the guidelines which shall be applicable to State Co-operative Banks and Central Co-operative Banks for seeking prior approval of RBI for appointment, re-appointment or removal of Statutory Auditor (SA), and other related matters.

These guidelines shall come into effect from April 1, 2024. Accordingly, for all accounting periods commencing on or after April 1, 2024, all StCBs and CCBs shall submit application for prior approval of RBI before July 31 of the reference accounting year, in accordance with the guidelines.

Key highlights of the guidelines:-

1. The bank shall obtain prior approval of RBI before appointment, re-appointment or removal of SA. The bank shall seek prior approval for re-appointment of SA annually.
2. Board / ACB of the bank shall monitor and assess the independence of auditors and conflict of interest, if any, in terms of the relevant statutory / regulatory provisions, Standards and best practices. Concerns, if any, raised by the Board / ACB shall be reported to NABARD.
3. The SA shall report concerns regarding the conduct of Management to the Board / ACB and also to NABARD.
4. Tenure and Rotation of Statutory Auditors (SAs)
5. Number of StCBs / CCBs an Audit firm can Audit
6. Audit Fees and Expenses of Statutory Auditors (SAs)
7. Eligibility Criteria for Appointment as SA - Basic Eligibility for StCBs / CCBs
8. Procedure for Appointment of SA
9. Guidelines for selection of branches for audit by SAs

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