Financial Daily from THE HINDU group of publications
Monday, Feb 13, 2006
Financial Daily from THE HINDU group of publications Monday, Feb 13, 2006 |
|
|
|
|
|
|
|
Home Page
-
Public Sector Banks Money & Banking - Auditing PSU banks cagey on getting more freedom to appoint auditors — Feel RBI better placed on this aspect
Sarbajeet K. Sen
New Delhi , Feb. 12 AMIDST the clamour for freedom to manage their own affairs, banks feel that the Government's decision to grant autonomy to public sector banks to appoint statutory central auditors and branch auditors is something they could have done without. The Government-owned banks appear to be less than prepared to handle the new freedom and the general feeling appears to favour the continuation of the earlier practice of the Reserve Bank of India retaining the powers to appoint the auditors. "It is too early to leave the entire exercise of appointing these key auditors, especially the statutory central auditors (SCA). Banks do not seem to be prepared to handle the appointments on their own," the Chairman and Managing Director of a leading PSU bank told Business Line. This view would please the accounting community that has also been opposing the newly granted freedom to the PSU banks. The apex body of accountants, the Institute of Chartered Accountants of India(ICAI), has already protested the move and has said that allowing banks to appoint SCAs would be a compromise on the principle of good governance under which such appointments should be done either by the regulator or the shareholders. Top PSU bankers said they were worried that if the banks decide to appoint their own SCAs and branch auditors, they might be opening themselves to criticism. "Being majority-owned by Government, we are more prone to criticism than private banks," said the CMD of another PSU bank, on conditions of anonymity. Bankers also said that for the freedom to be exercised properly, the RBI should chalk out detailed guidelines on the eligibility of auditors for appointment. "There should be proper guidelines based on which the appointments should be made. This would help us stave off criticism at a later stage," a banker handling the audit affairs of a PSU bank said. The move to grant autonomy in appointments of auditors was intended to bring PSU banks on a level-playing field with their private sector counterparts whose boards already enjoy such freedom. The Ministry in its letter to the CMDs of banks informing them of its decision had said: "PSBs may obtain the names of SCAs and branch auditors directly from the Comptroller and Auditor General and ICAI respectively and appoint them with the prior approval of the RBI or the present practice may be followed and the RBI may appoint the SCAs in consultation with the Government." Bankers feel that, given the reluctance to take the plunge, most banks might opt for the second option and seek the RBI's help in making the appointments, at least for the time being.
Related Stories: More Stories on : Public Sector Banks | Auditing | RBI & Other Central Banks
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|