ICAI favours keeping banks’ current advance limit unchanged

August 24th, 2012 - 9:07 pm ICT by IANS  

P. Chidambaram Kolkata, Aug 24 (IANS) The Institute of Chartered Accountants of India (ICAI) will appeal to the finance minister to retain the current advance limit of bank branches for purpose of independent audit, its president said Friday.

Jaydeep. N. Shah, president of ICAI, told IANS: “We will meet Finance Minister P. Chidambaram next month and appeal to retain the current Rs.6 crore limit of advance by a branch for an independent audit on bank branches.”

A committee comprising officials from the Reserve Bank of India (RBI) and the union finance ministry has recommended increasing the minimum advance limit for branches of PSU banks eligible for independent audit from Rs.6 crore to Rs.20 crore.

“The committee has recommended it (increasing advance limit) is not final. We have put our note that it is not in the interest of the country, because if the limit is raised to Rs.20 crore, large number of bank branches will be out of purview of audit,” said Shah.

Shah mentioned that the Comptroller and Auditor General (CAG) had also put a note of dissent to the proposal.

“The CAG has also put a dissent note in a different manner. It has said that it (proposal) should not lead to scope limitation, because if you are limiting the scope then it may not have proper impact as far as audit is concerned,”

“Secondly, whatever limit is decided on, there should be proper risk analysis because if banks are not audited then it would be a risk,” Shah said.

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