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Mumbai, Feb. 10

The Reserve Bank of India on Tuesday said that besides company secretaries, banks lending under consortium arrangement/ multiple banking arrangements can also obtain regular certification regarding compliance of various statutory prescriptions from chartered accountants and cost accountants. This arrangement is aimed at strengthening the information sharing system among banks in respect of the borrowers enjoying credit facilities from multiple banks. Banks, if they so want , may also seek additional certification either from chartered accountant or company secretary or cost accountants with respect to company directors not figuring in defaulters list (RBI/ECGC)/willful defaulters list etc.); details of litigation above a specified cut off limit; a specific certificate, probably from the Company Secretary, regarding compliance with Sec. 372 (a) of the Companies Act; details of creation/ modification/satisfaction of charges on the assets of the company, position regarding insurance, show cause notices received, finds and penalties awarded. As regards rotation of auditors, for the sake of operational convenience, the RBI suggested that they may be changed once every 5 years instead of every 3 years. In order to avoid concentration, group companies may have different statutory/ internal auditors in case group turnover exceeds Rs 100 crore.

— Our Bureau

More Stories on : RBI & Other Central Banks | Corporate Governance | Auditing

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