The Reserve Bank of India (RBI) has issued guidelines on the appointment of Statutory Central Auditors (SCAs) for Public Sector Banks (PSBs) to ensure proper financial auditing. These guidelines, introduced on April 27, 2021, outline the maximum number of SCAs a bank can appoint based on its asset size and operational complexity.
Clarifications by Finance Ministry
On March 11, 2025, the Indian Minister of State for Finance, Shri Pankaj Chaudhary, responded to Unstarred Question No. 1360, raised by Smt. Sulata Deo in Parliament. The response clarified how RBI determines the limits on SCAs and whether banks have adhered to these limits.
Key Points from the RBI Guidelines
- The maximum number of SCAs a bank can appoint depends on its asset size and extent of operations.
- This ensures audits are conducted effectively and on time.
- The actual number of SCAs is decided by the respective bank’s Board.
- Factors considered by the banks include:
- Size and spread of assets
- Complexity of transactions
- Level of computerization
- Availability of independent audit inputs
- Financial reporting risks
Analysis of Auditor Appointments
The RBI has also analyzed why some banks have not appointed the maximum number of SCAs. The findings indicate that banks take various factors into account before finalizing the actual number of auditors, rather than simply appointing the maximum allowed.
This policy ensures that audits remain efficient, risk-based, and tailored to each bank’s specific needs while maintaining transparency in financial operations.
