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RBI extends risk-based internal audit system to HFC

Mumbai: Friday’s Reserve Bank has selected a mortgage lender to extend its risk-based internal audit (RBIA) system and improve the quality and effectiveness of its internal audit system.
In February of this year, RBI issued a notice mandating the RBIA framework to some non-bank financial institutions (NBFC) and city co-operative banks by March 31, 2022.
On Friday, the RBI extended the provisions issued to NBFC to the Hybrid Fiber-coaxial (HFC) through circulation.
According to the Central Bank, this provision applies to HFCs that receive all deposits, regardless of size, and HFCs that receive non-deposits with an asset size of 5,000 rupees or more.
Such HFCs are required to implement the RBIA framework by June 30, 2022.
Effective RBIA links the organization’s overall risk management framework and provides guarantees to the board and senior management for the quality and effectiveness of the organization’s internal controls, risk management, and governance-related systems and processes. It is an audit method to do.
According to the RBI’s February Circulation, the internal audit function needs to use a systematic and disciplined approach to broadly assess and contribute to overall improvements in organizational governance, risk management, and management processes. there is.
He said this function is an integral part of sound corporate governance and is considered the third line of defense.
Historically, NBFC / UCB’s internal audit system has generally focused on transaction testing, testing the accuracy and reliability of accounting records and financial reporting, and compliance with legal and regulatory requirements, but changing scenarios. May not be enough.
In addition to trading testing, the central bank is migrating to a framework that focuses on assessing risk management systems and management procedures in various areas of business, predicting potential risk areas and predicting such risks. He said it would help mitigate.
In February, the Reserve Bank of India stated the following about all deposit handling NBFCs: All non-deposit type NBFCs with assets of 5,000 rupees or more. In addition, all UCBs with an asset size of Rs 500 or above must implement the RBIA framework by March 31, 2022.



RBI extends risk-based internal audit system to HFC

Source link RBI extends risk-based internal audit system to HFC

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