RBI asks NBFCs, UCBs to implement risk-based audit

The Reserve Bank of India (RBI) on Wednesday directed non-banking monetary corporations (NBFCs) and concrete cooperative banks (UCBs) to implement a risk-based inside audit (RBIA) system. All non-deposit taking NBFCs with asset dimension of Rs 5,000 crore and above, all deposit-taking NBFCs no matter their dimension and all main UCBs with asset dimension of Rs 500 crore and above should migrate to the brand new system, the regulator mentioned.
“In order to ensure smooth transition from the existing system of internal audit to RBIA, the concerned NBFCs and UCBs may constitute a committee of senior executives with the responsibility of formulating a suitable action plan,” the RBI mentioned. The committee might tackle transitional and alter administration points and will report progress periodically to the board and senior administration, it mentioned.

“It is in line with the momentum that RBI has showcased in deep-supervision of non-bank entities that could potentially have larger impact in the market, either in terms of consumer base or the system itself,” mentioned Srinath Sridharan, impartial markets commentator.