CS Professional · Banking and Insurance - Laws and Practice · Professional Opportunities
A Company Secretary is engaged to conduct a due diligence review of a bank's lending processes before a stake sale. Which statement correctly reflects her professional role?
She may examine records, documentation and compliance with RBI directions and report findings, but this does not replace the statutory auditor's role. A Company Secretary cannot waive regulatory non-compliance or exercise RBI's supervisory powers, such as deciding NPA classification for the regulator.
- AShe may examine records, compliance with RBI directions and documentation, and report findings, without replacing the statutory auditor's roleCorrect
- BShe may sign the bank's statutory audit report under banking law
- CShe may waive RBI non-compliances discovered during diligence
- DShe may decide the classification of accounts as NPA on behalf of RBI
Explanation
Due diligence is an advisory and verification service: reviewing records, documentation and RBI compliance and reporting findings. It does not substitute the statutory audit, nor can the professional waive regulatory breaches or take over RBI's supervisory powers.
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