Risk-Based Internal Audit (RBIA) system is mandatory for all Scheduled Commercial Banks
- REEDLAW
- Feb 3, 2021
- 1 min read
An independent and effective internal audit function in a financial entity provides vital assurance to the Board and its senior management regarding the quality and effectiveness of the entity’s internal control, risk management and governance framework. The essential requirements for a robust internal audit function include, inter alia, sufficient authority, proper stature, independence, adequate resources and professional competence.
The introduction of Risk-Based Internal Audit (RBIA) system was mandated for all Scheduled Commercial Banks (except Regional Rural Banks) vide our circular DBS.CO.PP.BC.10/11.01.005/2002-03 dated December 27, 2002, which was further supplemented vide circular DoS.CO.PPG./SEC.04/11.01.005/2020-21 dated January 07, 2021.
It has now been decided to mandate RBIA framework for the following Non-Banking Financial Companies (NBFCs) and Primary (Urban) Co-operative Banks (UCBs):
All deposit taking NBFCs, irrespective of their size;
All Non-deposit taking NBFCs (including Core Investment Companies) with asset size of ₹5,000 crore and above; and
All UCBs having asset size of ₹500 crore and above.
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