BANKING AFFAIRS

Detailed explanation-1: -iii) In terms of section 41 (i) of the SBI Act 1955, the appointment of statutory auditors of the Bank is required to be done by the RBI. Our Bank would, therefore, select SCAs/SBAs for appointment by RBI in accordance with the statutory provisions.

Detailed explanation-2: -Government companies like RBI, LIC, SBI and other PSU banks engaged in commercial activities are audited by statutory auditors and not CAG, as it is believed that they require understanding of complex financial accounting standards and the CAG does not have that expertise.

Detailed explanation-3: -In nationalized banks auditor is appointed by the bank concerned acting through its Board of Directors. Here, approval of the Reserve Bank of India is required before the appointment. The Comptroller and Auditor General of India in consultation with the Central Government appoint the auditor of the State Bank of India.

Detailed explanation-4: -The following procedure will be adhered to for appointment of Statutory Branch Auditors (SBAs) in PSBs: The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.