RBI revises norms for Concurrent Audit System of Banks

The Reserve Bank of India ( RBI) has revised the norms for concurrent audit system of banks.

Concurrent audit aims at shortening the interval between a transaction and its independent examination.

Some of the revised norms included the option to consider whether concurrent audit should be done by bank's own staff or external auditors (which may include retired staff of its own bank) continues to be left to the discretion of individual banks.

The revised norms state 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 (including skills of the staff employed) of the work of the concurrent auditors reporting to her/him.

The norms further stated that the bank should frame a policy for fixing accountability in cases of serious acts of omission or commission noticed in the working of bank's own staff or retired staff, working as concurrent auditors.

A quarterly review containing important features brought out during concurrent audits should be placed before the Audit Committee of the Board of Directors (ACB)/Local Management Committee ((LMC). The zone-wise findings of concurrent audit may be reported to ACB/LMC on a quarterly basis.