Explained | How new RBI rules change the way auditors function in banks - MMJC

The Reserve Bank of India (RBI) has tightened norms for the appointment and functioning of auditors in commercial banks and non-banking finance companies (NBFCs). The role of auditors has been questioned whenever bank frauds have happened in the past including the PNB scam, YES Bank, IL&FS and DHFL episodes.  The irregularities, in most cases, happened over a period of years and there is a view among experts that auditors are equally responsible for such events.

Makarand Joshi, founding partner, MMJC and Associates said rotation of auditors said the issues in large NBFCs like ILFS and DHFL witnessed over the past few years has been a wake-up call for the regulator. “This is an attempt to improve transparency and reliability. The new norms would mean that management will have to invest time to make new auditors familiar with working of NBFC or financial institution more frequently,” Joshi said.

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https://www.moneycontrol.com/news/business/explained-how-new-rbi-rules-change-the-way-auditors-function-in-banks-6831281.html