Reserve Bank bans SR Batliboi from auditing bank books

Acting tough on audit firms, the Reserve Bank of India (RBI) has barred chartered accountancy firm SR Batliboi & Co LLP from auditing commercial banks for a year. This is a first of its kind action against a audit firm by the RBI.

RBI has identified lapses in an audit work done by the company, however, the regulator has not disclosed the details of the same. This action comes at a time when the Indian banking systems is facing bad loan crisis and the non-banking finance company (NBFCs) or shadow banks are struggling with liquidity crunch after the IL&FS crisis. Audit and rating firms have been facing the heat for not been able to identified these crisis during the statutory audit process. Back in June 29, 2018, RBI had set out a framework to address lapses committed by statutory auditors (SAs).

SR Batliboi is affiliated to Ernst & Young (EY) group. The company had conducted audit assignments for the now collapsed Infrastructure Leasing & Financial Services (IL&FS) Limited and its group company and is appointed as an auditor for Interglobe Aviation, South Indian Bank and Aavas Financiers.