Please refer to our circular UBD.No.Plan.(PCB).9/09.06.00-94/95 dated July
25,1994 advising all UCBs to constitute an apex level Audit Committee of Board
(ACB). ACB may consist of the Chairman and three/four directors, one or more
such directors being Chartered Accountants or having experience in management,
finance, accounting and audit systems etc. The ACB is required to oversee the
internal inspection, statutory audit, inter branch / inter-bank accounts,
balancing of books, major areas of house-keeping, etc. The Committee is also
required to focus attention on preventive aspects as well as follow up action on
frauds.
2. As delay in various aspects of frauds like detection, reporting to regulatory and enforcement agencies and action against the perpetrators of the frauds has been causing concern, the need is felt for paying focused attention on monitoring of frauds at the highest level and suggested constituting a subcommittee of the Board which would be exclusively dedicated to the monitoring of fraud cases. There is also a need to assign a well defined role to the Board of the banks in monitoring of fraud cases. It has, therefore, been decided that the Boards of banks should constitute a Special Committee for monitoring and following up cases of frauds involving amounts of Rs.1 crore and above exclusively, while ACB may continue to monitor all the cases of frauds in general.
3. The broad guidelines regarding constitution and functions of the Special Committee of the Board are given in the following paragraphs :
2. As delay in various aspects of frauds like detection, reporting to regulatory and enforcement agencies and action against the perpetrators of the frauds has been causing concern, the need is felt for paying focused attention on monitoring of frauds at the highest level and suggested constituting a subcommittee of the Board which would be exclusively dedicated to the monitoring of fraud cases. There is also a need to assign a well defined role to the Board of the banks in monitoring of fraud cases. It has, therefore, been decided that the Boards of banks should constitute a Special Committee for monitoring and following up cases of frauds involving amounts of Rs.1 crore and above exclusively, while ACB may continue to monitor all the cases of frauds in general.
3. The broad guidelines regarding constitution and functions of the Special Committee of the Board are given in the following paragraphs :
a) Constitution of the Special Committee....................
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