Nabard raps co-op banks for audit delay

National Bank for Agriculture & Rural Development (Nabard), in a hard-hitting communication to all state cooperative banks (SCBs ) and district central cooperative banks (DCCBs), has said further delay in completion of audit will not be tolerated.

Inordinate delays leads to non-compliance to Section 31 of the Banking Regulation Act, 1949.

Nabard also made it clear that these banks will have to complete their annual reports within the stipulated time and no further extension will be granted for the completion of balancesheets of 2008-09.

Nabard sources told FE on Wednesday, ?As per Section 29 & 30 of the Banking Regulation Act, 1949, the state and district central cooperative banks are required to prepare the balancesheet and P&L account and get the same audited by statutory auditors.

Further, Section 31 of the Act stipulates that the balancesheet referred to in Section 29, together with the auditor?s report, shall be published in the prescribed manner and three copies thereof shall be furnished as returns to the RBI as well as Nabard within six months from the end of the financial year (i.e., by September30).

However, it has been observed that there has been inordinate delay in completion of audit and consequent non-compliance to Section 31 of the BR Act, 1949 (AACS), by a number of banks in the last few years.

Many banks were found to approach the RBI directly for extension of annual accounts publication due to the delay in completion of audit.

Sources said the issue was discussed in the co-ordination committee meeting with the RBI recently and it was decided that no extension should be granted to banks by the apex bank for submission of balancesheets for the year 2008-09.

Sources also said the statutory audit of cooperative banks is now being conducted by the chartered accountants in respect of those states which had amended their State Cooperative Societies? Acts.

In those states, there should not be any reason for delay in taking up and completion of audit in time as Nabard has issued the approved panel of auditors in the month of January/February.

In respect of other states, the banks may request the departmental auditors/chartered accountants, as the case may be, to expedite the completion of audit within September 30.