Dear Members,

The bank audit season is around the corner and the Reserve Bank of India (RBI) has made several significant announcements requiring the attention of Statutory Branch Auditors (SBAs). These include revised guidelines on Basel III capital regulations, prudential norms for income recognition, asset classification, and provisioning pertaining to advances, as well as master directions on external commercial borrowings, trade credits and structured obligations, Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), transfer of loan exposures, and presentation & disclosures of financial statements of banks.

The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has issued 2024 Edition of the Guidance Note on Audit of Banks to guide the members w.r.t. the aforementioned developments. The Guidance Note has been updated to reflect recent pronouncements by ICAI relevant to bank audits and any amendments/changes in applicable laws or regulations.

Given the fact that the banking industry is typical in terms of its geographical reach and diverse customer base, along with the extensive range of products and services offered, conducting audits within the given timelines poses numerous challenges for the members. These challenges may include determination of Non-Performing Asset (NPA) status, implication of complex data encountered during branch audits, encountering situations where relevant RBI circulars are unavailable, understanding the implications of requirements of RBI circulars, assessing the nature and adequacy of documentation, determining appropriate wordings for audit reports on crucial matters in bank branch audits, addressing reporting requirements for Long Form Audit Reports, considering recommendations from committees such as Ghosh and Jilani, and preparing special purpose reports and certificates etc. These requirements underscore the importance of thorough preparation and staying updated with regulatory guidelines to effectively perform bank branch audits.

With a view to support the members for fast resolution of such queries, AASB is pleased to announce an Online Panel of Experts for addressing Bank Branch Audit related queries for financial year 2023-24. The Panel will address queries from 1st April 2024 till 30th April 2024.

The queries are to be sent at email address: bankauditfaq[at]icai[dot]in

Panel Convenors

CA. (Dr.) Sanjeev Kumar Singhal, Chairman, AASB and CA. Vishal Doshi, Vice Chairman, AASB

The members are specifically informed that the views expressed by the experts of the Panel would be their personal views and not necessarily the views of the AASB or the ICAI. AASB, ICAI or the experts of the Panel, do not accept any responsibility for actions taken by the querists based on such advice. Further, these views are not to be used as evidence in any non-judicial/ quasi-judicial/ judicial proceeding before any authority.

To enable us to serve you better, you are also advised to:

• Be brief but provide full information and facts.
• Not to mention the name of the Bank or Branch or the name of the Borrower or Depositor to avoid problem of violation of client confidentiality requirements under the ICAI’s Code of Ethics.
• Avoid rejoinders.
• Not to send the same query twice.
• Draft the report on your own.
• Use own judgment.