High trade associations have urged the Reserve Bank of India (RBI) to place off the execution of its new auditing rules for banks and NBFCs and think about the proposed guidelines, quoting transition issues for each firm and auditor. Confederation of Indian Industries (CII), Assocham, and Finance Trade Improvement Council (FIDC) have written to the RBI concerning the issues firms would face in implementing the proposed laws for the appointment of statutory auditors.

The RBI on April 27 had issued some rules for the appointment of statutory auditors of business banks, NBFCs, and housing finance firms, instructing sweeping adjustments to provisions relating to a number of auditors.
Some instructions within the round want additional thoughts, overviews, and revisit for applicable modification because the laws in the current times will trigger execution challenges resulting from time restrictions and Covid disruption, and hardship to the banks and NBFCs, Assocham mentioned in its letter. The rules don’t prescribe any transitional provisions, and due to this fact, firms and auditors virtually don’t have any time to sufficiently perceive, plan and handle the adjustments, it mentioned.

“We strongly assist RBI’s need for audit reform; however, the similar must be phased in over 3-5 years, similar to compulsory audit rotation was launched in Firms Act 2013 however made efficient solely FY18,” mentioned Vishesh Chandiok, CEO of consulting and auditing agency Grant Thornton Bharat.