RBI issues guidelines for appointment of statutory auditors of banks, NBFCs

The Reserve Bank of India has tightened norms for appointing auditors and has capped the numbers based on the asset size of the bank with an aim to prevent wide variations in asset classification and misleading accounts statements. Banks shall take prior approval from the RBI on the appointment of auditors, but non-bank lenders can go ahead with just intimating the regulator. As per the new norms, banks will be required to take prior approval of the RBI for appointment or reappointment of statutory auditors on an annual basis. For entities, having an asset size of more than Rs 15,000 crore, statutory audit will be conducted under joint audit of a minimum of two audit firms. All other entities should appoint a minimum of one audit firm for conducting statutory audit.