Skip to content

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

While auditing Lotus Credit Ltd, an NBFC, CA Dev obtains information that the RBI collected through its inspection of the company. A journalist asks Dev to share it. Which conclusion about confidentiality under the RBI Act, 1934 is correct?

Dev should decline, because section 45NB treats information in statements submitted to the RBI, or obtained by the RBI through audit or inspection, as confidential. It cannot be disclosed except in the situations the section provides, and a journalist's request is not one of them.

  1. AInformation obtained by the RBI through audit or inspection is treated as confidential and cannot be disclosed except as the section provides, so Dev should declineCorrect
  2. BSuch information may be freely shared with the press since the NBFC is a public company
  3. CIt may be shared if the journalist undertakes to publish only in summary form
  4. DIt becomes public once the audit report is signed

Explanation

Section 45NB(1) treats information in returns submitted under the chapter, or obtained by the Bank through audit or inspection, as confidential and not to be disclosed except as the section provides. None of the exceptions in sub-section (2) covers a journalist's request. The other options invent exceptions.

Did you get it right without looking?

One question tells you little. A timed set on Special Features of Audit of Banks & Non-Banking Financial Companies shows your real accuracy, how long you take and where you lose marks.

Practise Special Features of Audit of Banks & Non-Banking Financial CompaniesFree diagnostic mock

More Special Features of Audit of Banks & Non-Banking Financial Companies questions