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Commercial banks will have to take prior approval of the Reserve Bank of India (RBI) for appointment of Statutory Central Auditors (SCA) and Statutory Auditors (SAs).

The RBI on Tuesday issued of guidelines for appointment of statutory central auditors (SCAs) and statutory auditors (SAs) of commercial banks, excluding regional rural banks, UCBs and NBFCs, including Housing Finance Companies.

Banks should apply to Department of Supervision, RBI before July 31, of the reference year and the Public Sector Banks (PSBs) shall approach RBI within one month of receipt of list of eligible audit firms from RBI.

While NBFCs do not have to take prior approval of RBI for appointment of statutory auditors, all NBFCs need to inform RBI about the appointment of the statutory auditors for each year by way of a certificate in 'Form A' within one month of such appointment.

For entities with asset size of Rs 15,000 crore and above as at the end of previous year, the statutory audit should be conducted under joint audit of a minimum of two audit firms. All other entities should appoint a minimum of one audit firm for conducting statutory audit.

Further, it shall be ensured that joint auditors of the entity do not have any common partners and they are not under the same network of audit firms.