New Delhi, May 10, 2017
Need to assess impact of demonetisation on banks, says ICAI chief Vikamsey
The CA Institute has urged the Finance Ministry and the Reserve Bank of India (RBI) to allow its members to undertake focused “special audit” of deposit flows into the banking system during the demonetisation period, which started on November 8 and ended on December 31 last year.
There is a need to assess the demonetisation impact at each of the bank branches vis-à-vis the RBI circulars on this issue and gauge the extent of compliance, Nilesh Vikamsey, President, Institute of Chartered Accountants of India (ICAI) told BusinessLine in an interview here on Wednesday. “Whether the compliance with RBI circulars or government intent has happened or not in each branch is something that needs to be assessed and a focused special audit of demonetisation is the need of the hour,” Vikamsey said.
The CA Institute also plans to take this suggestion on “special audit” to the Central Board of Direct Taxes (CBDT), he added.
Banks had reportedly conveyed to the Income-Tax Department that there were more than 91 lakh cases where the amount deposited in banks had exceeded Rs.2 lakh in each case during the demonetisation period.
“We have members all over the country including small towns. If a specific scope is made out, we can help the RBI..help the government and regulators in whatever they want to identify and verify,” said Vikamsey.
Bank branch auditors
Meanwhile, Vikamsey said that as many as four public sector banks (PSBs) have approached the CA Institute to develop software that could be used for centralised appointment of branch auditors in a bank. “The whole idea is to improve the auditor appointment process and ensure that there are scientific criteria and no adhocism or arbitrariness,” he said.
This follows the recent RBI directive to banks to have a centralised appointment of branch auditors through software.
The PSBs could either have their own software or bank upon a third party (the CA Institute) to develop the software, the RBI had allowed. The new process of appointment of branch auditors for public sector banks will take effect from 2017-18.
“We are happy that we have moved at least one level. Ideally, we would have liked RBI to set up the software and give it to them. They (RBI) have given freedom to the banks to have their own software. Be that as it may, we have actually progressed one step.
“We actually wanted an independent agency to develop the software so that there is no iota of any bias anywhere,” said Vikamsey.
In the last few years, the CA Institute had been opposed to the government’s decision to give freedom to the public sector banks to appoint their own auditors.
[The Hindu Business Line]