RBI advises Banks to ensure independence in internal audit

The Reserve Bank of India has asked banks to ensure that the internal audit function has sufficient authority, stature, independence and resources to enable internal auditors carry out their assignments with objectivity. It also emphasised that this function cannot be outsourced.

These directives are aimed at strengthening governance arrangements in banks under the Risk-Based Internal Audit (RBIA) Framework.

The central bank said the Head of Internal Audit (HIA) should be a senior executive of the bank with the ability to exercise independent judgment. The HIA, as well as the internal audit function, should have the authority to communicate with any staff member and access to all records or files.