The Conveyor of Chartered Accountants Association (CAA) Kiran Singh Chavda has filed a petition against the RBI in the Gujarat High Court.
A case has been registered in the Gujarat High Court against RBI.
The decision of the merger of Allahabad Bank with the Reserve Bank of India in the Indian Bank has been overshadowed. According to a report published in the Economic Times, several Chartered Accountant Firms (CA Firms) which used to conduct audits for the branches of Allahabad Bank have filed a case against the RBI in the Gujarat High Court. These CA firms say that when Allahabad Bank was merged with Indian Bank, RBI removed them from audit work.
The Conveyor of Chartered Accountants Association (CAA) Kiran Singh Chavda has filed a petition against the RBI in the Gujarat High Court. This association had earlier approached the Kolkata High Court in a similar case. As per the current regulation, most public sector banks enter into agreements with local CA firms for their branch audit. Main auditors also have full faith in these audit reports. This audit culture is adopted everywhere along with SBI as well as Allahabad Bank, Indian Bank.
Appointment of audit firm for four years
The petition filed in the court said that under the current regulation, the bank appoints any auditor or audit firm for four years. But after the merger, the Reserve Bank ended the contract of several auditors of Allahabad Bank. These audit firms are upset with this.
All decisions with the consent of RBI
Under the Banking Regulation Act, every bank is required to audit its financial statements. Only a qualified auditor can do this work. Both appointment and removal of these auditors are possible only after getting approval from the Reserve Bank. Experts in this case say that the rules are clear, yet there is no transparency of the rules regarding the situation like merger. However, in its decision, the Kolkata High Court had asked the RBI not to appoint a new auditor.
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