Banks to have a say in selecting auditors from next year

In order to give greater autonomy to public sector banks, the Finance Ministry is working on a framework which will give lenders the authority to select statutory auditors, a pattern that would come into effect from next fiscal.
"We are now thinking of a framework were banks could be involved. The objective of this is to have smooth audit and give autonomy to banks," Financial Services Secretary G S Sandhu said.
"Hopefully from next fiscal they would be allowed to select statutory auditors," he said.
At the moment, there are some issues. Bank involvement is not there in selecting the statutory auditors as of now, he said.

At the moment, auditors are being appointed by a panel headed by Additional Secretary of Department of Financial Services, Chairman Indian Banks' Association and representative of CAG.
"So, there is no representation from the bank. We are therefore looking to include banks in the selection process," he said.

The ministry prescribes the evaluation criteria in consultation with bank, CAG and RBI, he said, adding, "then ask the CMDs of banks to do the selection based on the criteria."
Number of statutory auditors varies based on the size of the balance sheet of a bank. For example State Bank of India had 14 statutory auditors for the financial year 2013-14.

Punjab National Bank had 6 statutory auditors while United Bank of India had 4 auditors.