Mar 09, 2012, 10.18 AM | Source: CNBC-TV18
RBI may soon do away with branch audits; to save public sector banks hundreds of crores, reports CNBC-18's Gopika Gopakumar quoting sources.
Gopika Gopakumar (more)
Correspondent, CNBC-TV18 |
Most PSU banks have two kinds of auditors, statutory central auditors and statutory branch auditors. Statutory central auditors for most banks are around 6 but when it comes to branch auditors the number runs into thousands. For instance SBI has around 3625 branch auditors. Punjab National Bank has 1300 branch auditors. All this compared to private sector banks which have only one statutory central auditor.
Also when you compare the auditor fees public sector banks- SBI for instance pay as much as Rs 124 crore as auditor fees compared to Rs 2 crore which ICICI pays to it's auditors. So thatís the reason why RBI is looking to bring down the number of branch auditors for public sector banks.
Currently branches with advances of more than Rs 3 crore and above comes under branch auditors but the RBI is looking to increase their number to Rs 20 crore advances and above.
Now even the RBI governor in December last year had mentioned that the relevance of branch audits had significantly declined but thatís largely because after the implementation of core banking system the relevance has actually declined and there is no need for branch auditors but for statutory central auditors.
So, thatís the reason why RBI is looking to reduce the cost for public sector banks but the final numbers on branch auditors for this fiscal has not been decided yet.
That has bankers got a little worried because the annual balance sheet for the current fiscal is yet to be decided and is yet to be audited but thatís largely because Institute of Chartered Accountants (ICAI) have objected to the reduction in the number of branch auditors clearly because of the number of auditors who will probably loss their jobs because if the RBI goes ahead and cuts the number of branch auditors.
Also watch the accompanying video.
Focus on individual stocks; Budget to be a non-event: Quantum
Sanjay Dutt, Director, Quantum Securities believes
27 PSU banks write off Rs 1.14 lakh cr bad debts during 2012-15
For the fiscal ended March 2015, public sector ban
Exit SBI on rallies, says Ashu Madan
Ashu Madan of Religare Securities advises exiting
Six in Sixty: Stocks you should keep on your radar
CNBC-TV18's Ekta Batra lists out stocks that you s
Negative on PSU banks, says Dipan Mehta
Dipan Mehta, Member at BSE & NSE has a negative vi
Conditions ripe to start NPL de-stressing cycle: Sanjay Nayar
Sanjay Nayar, CEO at KKR India says, it is crucial
PSU banks post losses in Q3 as bad loans mount
Central Bank of India reported a loss of Rs 836.62
RBI sets rupee reference rate at 67.81 against US dollar
According to an RBI statement, the exchange rates