Bankers expect more scrutiny of loan accounts

Following the Satyam scandal, bankers expect more intense scrutiny by auditors on classification of loan accounts as standard or non-performing in their account books.

Sources said that some bankers expressed their opinion on the matter during a meeting with RBI Governor D Subbarao yesterday. “Auditors are going to be far more searching in their assessments now. While examining our books, they will like to see if there are more skeletons in the cupboard,” said a banker who attended the meeting.

In case profitability comes under pressure, there is a possibility that banks may not make adequate provisions or defer it for the next quarter. But with the role of auditors under scanner, banks may have to deal with more audit queries, bankers said.