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June 16, 2001
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Money > Business Headlines > Report June 16, 2001 |
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RBI audits start early this yearGeorge Smith Alexander Stung by criticism of inaction in the Ketan Parekh affair, the Reserve Bank of India has started auditing of some of the private sector banks early this year. These include Bank of Punjab, Centurion Bank, Global Trust Bank, UTI Bank and IndusInd Bank. Though central bank officials said the investigations were routine and in the normal course of yearly inspections, banking sources said the RBI action is unusual because the audits of the five banks began simultaneously on April 16. Also, the audits were conducted even before the banks had finalised their annual accounts. Normally, RBI inspections begin only after the banks finalise their accounts. However, two of these banks-Centurion and Bank of Punjab-are yet to announce their annual accounts. While denying that the central bank was fishing for specific linkages, an RBI official said the inspections were a "continuing exercise." "When inspectors go to a bank, obviously they have in mind recent developments and it is perhaps natural that they look specially for evidence in that regard," the official explained. Bankers say it is a concerted move as the banks targeted have a reasonable capital market exposure. They also feel that the RBI's moves have been triggered by the JPC inquiries into the banking system's capital market exposure. According to another RBI official, "We felt it was necessary to schedule the audits earlier in some of the cases." When contacted by Business Standard, Bank of Punjab chairman Darshanjit Singh said, "The audit of the bank accounts started this year on April 16. Last year also, the RBI had started off its audit on April 4. They start off at our head office in Chandigarh depending on who was ready for the audit. The audits were also started at the State Bank of Patiala around the same time. There is nothing unusual about it." According to GTB officials, the audit started in the third week of April and finished last week. "It was a normal routine audit and it is for the RBI to say why it was done early," said the official. IndusInd Bank senior vice-president Suresh Pai said, "The RBI has inspected our accounts and given us a clean chit. It has also given us an improved rating." Authorised spokespersons for UTI Bank and Centurion Bank also confirmed that the RBI inspection was over. UTI Bank and IndusInd bank also said they had no exposure to Ketan Parekh or his group entities. Powered by YOU MAY ALSO WANT TO READ:
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