Mumbai: The Reserve Bank of India (RBI) has barred S R Batliboi & Co from carrying out audit assignments in commercial banks for one year starting April 1.
The central bank said the action was initiated on account of the lapses identified in a statutory audit assignment carried out by the firm.
On June 29, RBI had put in place an enforcement action framework in respect of statutory auditors for the lapses in the statutory audit of commercial banks.
RBI had pointed that statutory auditors of banks play an important role in contributing to financial stability when they deliver quality bank audits which foster market confidence in banks’ financial statements.
Quality bank audits are also a valuable input in the supervisory process of the Reserve Bank of India (RBI) for commercial banks.
In the interest of improving audit quality and with a view to instituting a transparent mechanism to examine accountability of statutory auditors in a consistent manner, RBI had decided to put in place a graded enforcement action framework to enable appropriate action in respect of the banks’ statutory auditors for any lapses observed in conducting a bank’s statutory audit. Such framework covered instances of divergence identified in asset classification and provisioning during the RBI inspection vis-à-vis the audited financial statements of banks above the threshold.
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