Review bank branch audit norms: ICAI

..................The contention of the CA Institute members’ are that banks are guided by their overall aggregate exposure in branches with advances of below ₹ 20 crore and feel that it may not be material enough to warrant a statutory audit every year. “They (banks) look at the aggregate picture and contend that such branches account for only say 15-16 percent of the bank’s total advances. But what they don’t realise is the risk factor. If there is increased NPA in such branches, the entire profit of a bank in a financial year could get wiped out”, a chartered accountant said. Rather than only looking at “materiality” in terms of advances, the risk factor also needs to be considered by the banks and banking regulator, it was pointed out............

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