The Institute of Chartered Accountants of India (ICAI) is set to suggest names of the chartered accountant (CA) firms to National Bank for Agriculture and Rural Development (NABARD) for appointment/re-appointment as statutory auditors of State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs) for FY26.
A senior official told FE that the applications of the “interested” CA firms are being vetted, and the names of the qualifying firms would be submitted to NABARD in 10 days. “From last year, the NABARD has started obtaining the panel of CA firms from the institute. This is as per the Reserve Bank of India’s (RBI’s) guidelines. We will be submitting the names in 7-10 days,” the official said.
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In January 2024, the RBI had notified that the StCBs and CCBs are required to obtain prior approval of RBI for appointment, re-appointment or removal of statutory auditor as per the provisions of the Banking Regulation Act 1949.
Further, in case of appointment of fresh auditors, the bank will select from the list provided by NABARD of the audit firms fulfilling the requirements, and forward the names of the shortlisted firms to RBI. NABARD is the apex supervisory body for StCBs, district CCBs, and regional rural banks (RRBs) in India.
Each bank is required to select the audit firms from the list, obtain the necessary approvals of the shortlisted firms from their board of directors or audit committee, and submit the application for approval from the Department of Supervision at RBI, before the July 31 of the reference financial year.
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The ICAI’s draft panel has been formed from the multipurpose empanelment form (MEF) that comprises nearly 40,000 CA firms. The CA firms are categorised by ICAI as per the RBI’s eligibility norms for appointment of statutory auditors.
Experts said that the statutory audits, along with strict internal controls, have become crucial for banks to detect frauds, and these stringent processes of fresh selection and re-appointment can help bring in more transparency and regulatory compliance in the co-operative banking ecosystem.
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