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The Reserve Bank of India (RBI) is expected to turn the knob on statutory auditors of banks, and by extension, on the role of their audit committees.
With governance concerns at IndusInd and Karnataka Bank, RBI is expected to tighten its engagement with statutory auditors and examine the role of board sub-committees more closely
Senior sources in the bank auditing fraternity are of the view that with governance issues cropping up in two banks all at once, the RBI is to intensify its engagement with them.
The reference here is to IndusInd Bank and Karnataka Bank, where the top two corner-room occupants in both banks stepped down in quick succession. This is also in line with Mint Road’s senior supervisory managers asking questions on bank.
RBI officials will more closely scrutinize statutory auditors and audit committee roles . Supervisory managers will evaluate the agenda quality, depth of discussions, and whether independent directors are expressing dissent .Discrepancies between audio recordings and official board minutes will also be checked .
These developments reflect a shift by the RBI towards a risk-based supervisory model, focusing not just on financial numbers, but also on governance quality and internal controls . The IndusInd episode underscores how audit and board failures can lead to major financial shockwaves.
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