RBI To Meet With Banks' CFOs, External Auditors To Stress On Regulatory Compliance: Report

The central bank plans to meet the CFOs and external auditors of commercial lenders on July 9, 2024, to urge the banks to keep a tab on failure to meet compliance and regulatory norms, the report said

Reportedly, the meeting will see RBI’s two deputy governors, M Rajeshwar Rao and J Swaminathan address the bank’s auditors and CFOs.

Source : PTI

The Reserve Bank of India (RBI) is set to meet the senior personnel of commercial banks on Tuesday, media reports said. 

The central bank plans to meet the chief financial officers (CFOs) and external auditors of commercial lenders on July 9, 2024, to urge the banks to keep a tab on failure to meet compliance and regulatory norms, reported The Economic Times citing sources familiar with the matter.

The report quoted sources and said that the meeting will see RBI’s two deputy governors, M Rajeshwar Rao and J Swaminathan address the bank’s auditors and CFOs. The banking regulator will aim to express zero tolerance towards lapses in compliance and also remind the executives about their responsibility to make sure that the banks’ balance sheets paint a correct picture of their financials.

Citing a senior bank official, the report said, “There is an element of trust deficit. This has led to a constant rift between the external auditor and the bank, and between the regulator and bank on the interpretation of the regulations, particularly regarding income recognition and provisioning of the loans.”

Notably, some of the banks reported a credit growth in the range of 15 per cent to 16 per cent, while their deposit growth dampened at 9 per cent to 12 per cent during the first quarter of the current fiscal year.

This matter was also taken up by Governor Shaktikanta Das earlier at a conference organised by the College of Supervisors. He noted during the time that while business growth remained crucial, it cannot happen at the cost of taking on ‘unacceptable risks’.

In a meeting recently with the senior management at banks, the banking regulator also alerted them to the importance of assurance functions in risk awareness and risk management.