RISK BASED INTERNAL AUDIT (RBIA)
RISK BASED INTERNAL AUDIT (RBIA)
RBI CIRCULAR Ref.No.DoS.CO.PPG./SEC.05/11.01.005/2020-21
RISK
BASED INTERNAL AUDIT (RBIA)
An independent and effective internal audit function in a financial entity provides vital
assurance to the Board and its management regarding quality, risk management, governance
framework and effectiveness of internal control. Requirements for internal
audit function includes, sufficient
authority, stature, independence and professional competence.
The introduction
of RISK
BASED INTERNAL AUDIT(RBIA) was mandated for all the Scheduled Commercial
Banks (except Regional Rural Banks) vide
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) Cooperative Banks (UCBs):
1. All
deposit taking NBFCs irrespective of their size.
2. All
Non Deposit taking NBFCs (including Core Investment Companies) with asset size
of Rs.5000 crores and above, &
3. All
UCBs with asset size of Rs.500 crores and above.
The above
Supervised Entities shall implement the
RBIA framework by March 31,2022 in accordance with RBIA Guidelines.
In order to ensure smooth transition to RBIA
from existing system of Internal Audit, the concerned NBFCs and UCBs may constitute a committee of Senior
Executives for laying out a suitable action plan. The Committee Constituted
shall report periodically to the Board and Senior management about the progress
in implementation of RBIA.
This circular should be placed before the Board in
next meeting. The implementation of these guidelines within the time limit as
prescribed should be done under the
supervision of Board.
Source: rbi.org.in
Reference: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12018&Mode=0