RBI should go back to appointing auditors for banks: AIBEA

Appointment of external auditors for bank audits continue to be mired in controversy. After the auditing profession regulator, the Institute of Chartered Accountants of India (ICAI), it is now the turn of the bank employees to oppose the freedom given to public sector bank boards to choose the statutory auditor.

The All-India Bank Employees Association (AIBEA) on Friday urged the Government that the earlier rule of Reserve Bank of India independently appointing auditors for the banks be restored immediately.

“We have demanded independent appointment of external auditor for bank audits. The earlier system of RBI independently appointing external auditors for audit of the banks should be brought back. Bank boards should not have the option to decide and appoint auditors,” Mr C.H. Venkatachalam, General Secretary, AIBEA, told Business Line.  Last year, the RBI had relaxed this condition and the bank boards were given the freedom to recommend the auditor of their choice for approval by the RBI.

The ICAI had recently shot off a letter to the Union Finance Ministry urging a review of the system of appointment of auditors in banks. It is of the view that the bank boards, whether it be public sector or private sector banks, should not have a say in the appointment of external auditors. This involvement of bank boards’ would raise independence issues, said a former ICAI President, who did not wish to be identified.