Banking Sector at Decadal High: RBI Emphasizes Auditor's Role in Economic Growth

The banking sector in India is experiencing a peak in financial performance. RBI Deputy Governor Swaminathan J emphasized the vital role of auditors in safeguarding financial stability and supporting economic growth. He highlighted various RBI initiatives to enhance audit effectiveness and underscored the sector's readiness to fuel the economy.

The Indian banking sector is experiencing a significant high in financial performance metrics, poised to bolster economic growth, as stated by Reserve Bank Deputy Governor Swaminathan J on Tuesday.

Addressing a gathering of statutory auditors and CFOs of major financial institutions, Swaminathan detailed several RBI initiatives aimed at enhancing audit processes, including structured meetings between supervisory teams and auditors, exception reporting, and streamlined auditor appointment procedures.

He urged auditors to maintain rigorous standards to prevent financial missteps and emphasized their critical role in evaluating internal financial controls, thereby minimizing the need for supervisory intervention. Additionally, auditors were highlighted as essential in identifying and reporting vulnerabilities swiftly to both bank management and the RBI.

Swaminathan pointed out that the banking sector is at a decadal high concerning financial parameters and well-prepared to support India's economic growth, provided meticulous standards are upheld. He stressed the collaboration among auditors, CFOs, and regulators is crucial for the integrity and stability of financial institutions.

The RBI's latest Financial Stability Report shows a significant decrease in commercial banks' bad assets, reaching a 12-year low. At the conference, industry leaders like Ajay Bhushan Prasad Pandey of the NFRA and ICAI President Ranjeet Kumar Agarwal emphasized the importance of accurate financial reporting and the pivotal role of auditors and CFOs in achieving India's economic aspirations.

The conference also featured technical sessions from industry experts and RBI officials.

(With inputs from agencies.)