ICAI : PNB Didn’t Hire Independent Auditor for Concurrent Audit

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No Independent / External Auditor Hired By PNB For Concurrent Audit :

Immediately after the report of major fraud in Punjab National Bank coming out in the various Newspapers,

the ICAI has taken suo moto cognizance of media reports and as a proactive step has sought assistance by writing to various investigating arms of Government including Central Bureau of Investigation (CBI),

Enforcement Directorate(ED), Security Exchange Board of India, requesting them to provide requisite details of their investigation.

The ICAI has also set up High Power Group to study the issues in PNB matter and suggest remedial measures and improvements in the banking system.

The Group has written to various officials of the bank including the Chairman of the Audit Committee and a member to provide relevant information in the matter so as to help the Group to understand the systemic issues.

The High Power Group appointed by ICAI is waiting for required documents / information from PNB officials to find out the systemic loopholes and it is worthwhile to note that the Group recommendations are dependent on availability of documents / information.

Ordinarily concurrent audit in bank is carried out by Independent firm of Chartered Accountants.

As per current system of appointment of auditors in PNB, Internal and Concurrent Audit was carried out by the PNB officials.

Though number of Government Agencies are trying to identify the culprit, yet it seems that prima facie the fraud is done by collusion of many persons, inside and outside the system.

The RBI in November, 2016, in order to strengthen the banking system, instructed all the banks to link their SWIFT System with CBS but due to non-linkage of two systems, PNB fraud remained undetected and LOUs issued and unauthorised LCs beyond sanctioned limit remained outside the books and CBS of PNB and therefore could not be detected by many supervisory layers.

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