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CS Professional · Banking and Insurance - Laws and Practice · Analysis of Financial Statements of Banks

Mahanadi Bank's statutory central auditors are being appointed for the year. Under the RBI framework, who must give prior approval to the appointment of the statutory auditors of a private sector bank?

The Reserve Bank of India must approve the appointment of statutory auditors of a private sector bank. This follows the Banking Regulation Act, 1949 and RBI guidelines on appointment of statutory auditors, which place the approval power with the regulator rather than SEBI or the Registrar of Companies.

  1. ASecurities and Exchange Board of India
  2. BReserve Bank of IndiaCorrect
  3. CInstitute of Company Secretaries of India
  4. DRegistrar of Companies

Explanation

Under section 30 of the Banking Regulation Act, 1949, the auditor of a banking company must be approved by the RBI, and the RBI guidelines on appointment of statutory auditors of commercial banks require prior RBI approval. SEBI or the ROC do not grant this approval.

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