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CA Final · Advanced Auditing, Assurance and Professional Ethics · Special Features of Audit of Banks & Non-Banking Financial Companies

CA Meera is the statutory auditor of Ganga Finserv Ltd, an NBFC. A bank that is a lender requests details of information Meera obtained from RBI's inspection report on the NBFC. The RBI Act, 1934 treats information relating to an NBFC obtained through audit or inspection by the Bank as confidential. Which course is correct for Meera?

Meera should not disclose it. Information relating to an NBFC obtained through audit or inspection by the RBI is confidential and can be disclosed only in the exceptions the Act provides, such as disclosure by the NBFC with the Bank's previous permission or disclosure required under law. A lender's request is not an exception.

  1. ADisclose it, since the lender is a stakeholder in the NBFC
  2. BDisclose it, since the NBFC's name is not sensitive
  3. CDisclose it only after publishing it in a newspaper
  4. DNot disclose it, because such information is confidential and may be disclosed only in the cases the section allows, such as with the Bank's previous permission to the NBFC or as required under lawCorrect

Explanation

Section 45NB(1) treats information in returns submitted to the Bank, or obtained through audit or inspection by the Bank, as confidential. Section 45NB(2) allows exceptions, such as disclosure by the NBFC with the Bank's previous permission, consolidated publication by the Bank without names, or as permitted or required under other law. A lender's request alone is not an exception, so Meera must decline.

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