Govt banks get autonomy to appoint auditor

The government today said public sector banks (PSBs) will get autonomy in selection and appointment of their Statutory Central Auditors (SCAs).

"The work of selection and appointment of SCAs henceforth, has been delegated to individual PSBs for the year 2014-15 onwards," the finance ministry said in a statement today.

The Reserve Bank of India (RBI) will provide the selection criteria for selecting SCAs to PSBs. The office of Comptroller & Auditor General (CAG) will provide the list of eligible auditors available with them and PSBs can make selection out of the list with the prior approval of RBI.

Currently, auditors are being appointed by a panel headed by Additional Secretary of Department of Financial Services, Chairman Indian Banks' Association (IBA) and representative of CAG. So, there is no representation from the bank.

The number of statutory auditors varies depending based on the size of the balance sheet of a bank. For example, State Bank of India had 14 statutory auditors for 2013-14, while Punjab National Bank had six and United Bank of India had four.

According to officials, the purpose behind changing the criteria was to have a smooth audit and give autonomy to banks as currently they are facing some issues with the auditors.