This refers to “RBI cracks whip on auditors, to fine-tune oversight regime” (April 29). A result-oriented oversight is key to saving the banking sector from the growing incidents of bank credit turning into bad loans, early mortality of loans, and related frauds. Despite the robust systems and procedures in existence, banks are losing their earnings significantly to meet the provision and write-off requirements on account of bad loans and frauds.
Auditing and inspections are being conducted to prevent monetary and credibility losses of banks and to ensure that the organisation is free from any vulnerability and is trusted by the customers and other stakeholders.
It is, therefore, essential that auditing and inspection must not be a routine affair, but it should serve the purpose it is actually meant for. The auditors or inspectors who conduct the audit and inspection must be well-versed in the job and must possess the calibre to detect deviations and violations. It is also imperative that the banking regulator should not spare earring auditors and/or auditing firms to ensure that the quality of the job is not compromised. . Bankers must ensure that the compliance reports to the audit reports must be specific, truthful and must maintain the desired level of quality.
V S K Pillai, Kottayam
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