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RBI/2007-2008/101
DBS.ARS.BC. No. 3/ 08.92.001/ 2007-08
July 25, 2007
To,
The Chairman & Managing Director, all Nationalised Banks and
The Managing Director, Associate Banks of SBI
Dear Sir/Madam,
Remuneration payable to the Statutory Central and
Branch Auditors of Public Sector Banks from the year 2006-07
Please refer to our circular DBS.ARS.No.BC.08/08.92.001/2006-07 dated June 06, 2007 on remuneration payable to statutory central and branch auditors of public sector banks for the year 2006-07. As regards fees in respect of tax audit we advise as under:
(i) The SCAs as hitherto may be assigned the Tax Audit work at the banks’ Head Office level ;
(ii) In order to maintain transparency and a fair distribution of work arrangement amongst the SCAs, tax audit work may be allotted by the banks to one of the existing SCAs by rotation and in consultation with the SCAs/ ACB;
(iii) The fee for tax audit payable to SCAs may continue to be paid at 20% of basic audit fee as prescribed hitherto;
(iv) As regards tax audit at branch level/ Controlling Office level, it has been decided that PSBs may decide on their own in consultation with ACB/ Board, the appointment of auditors as also the audit fees payable to them; and
(v) The system at (i) to (iv) above will be effective from the current year i.e. 2007-08. As regards the year 2006-07, the fee payable for tax audit at HO/Controlling Office and branches may be paid at the existing rate of 20% and 15% of basic audit fee to SCAs and branch auditors respectively.
Please acknowledge receipt.
Yours faithfully
(P.S. Sharma)
General Manager
The circular is regarding the remuneration payable to the Statutory Central and Branch Auditors of Public Sector Banks from the year 2006-07.
Statutory Central Auditors (SCAs) may be assigned the Tax Audit work at the banks' Head Office level. To ensure transparency and fair distribution, this work may be allotted by rotation in consultation with SCAs/ACB.
For the 2007-08 financial year onwards, the fee for tax audit payable to SCAs at the Head Office level will continue to be paid at 20% of the basic audit fee. For the year 2006-07, it was also paid at 20% of the basic audit fee.
For tax audit at the branch or Controlling Office level, Public Sector Banks (PSBs) may decide on their own, in consultation with ACB/Board, the appointment of auditors and the audit fees payable to them. For the year 2006-07, the fee was 15% of the basic audit fee.
The system for assigning and paying tax audit fees as outlined in points (i) to (iv) will be effective from the current year, i.e., 2007-08.
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