The Reserve Bank of India has issued directions, effective immediately, governing concurrent audits at commercial banks, excluding small finance banks, payments banks and local area banks. Banks must adopt a board-approved policy on using internal or external auditors, while the Audit Committee of the Board or local management of foreign banks must approve the audit scope, auditor tenure and remuneration and review the system’s effectiveness annually. Concurrent audits must cover each bank’s risk-sensitive activities and all centralized processing centers, with minimum coverage spanning cash, lending, know-your-customer and anti-money laundering compliance, payments, treasury, foreign exchange, card operations, employee conduct, mis-selling and regulatory compliance. External concurrent auditors may serve a bank continuously for no more than five years and a branch or business unit for no more than three years, while retired staff auditors are subject to an age limit of 70. Banks must immediately escalate major deficiencies and suspected fraud, report material findings quarterly to the board audit committee or local management, and establish accountability procedures for serious auditor omissions or misconduct. The directions repeal existing concurrent audit instructions while preserving actions and liabilities arising under them.
Reserve Bank of India2026-07-31
Reserve Bank of India issues concurrent audit directions for commercial banks, setting governance, coverage and auditor tenure requirements
The Reserve Bank of India has introduced immediate concurrent audit requirements for commercial banks, covering governance, risk-based scope, auditor appointments and reporting. All centralized processing centers must be audited, external auditors face five-year bank and three-year unit tenure limits, and major deficiencies or fraud must be escalated promptly.