The Reserve Bank on Sept 23 asked the auditors of non-banking financial companies to make a separate report to the concerned company''s board apart from the usual report under the Companies Act. The report must include the facts like whether the company holds certificate of registration from the Reserve Bank and whether the company is entitled to hold such certificate in terms of its assets and income pattern. In this regard the central bank of India issued NBFC Auditors Report (Reserve Bank) Directions 2008 replacing directions issued in 1998.
RBI official said, the new directions have not been issued because of ongoing global financial crisis but are a rejig of the existing norms. The direction also asked the auditors of public deposit taking NBFC to mention in the report whether it borrows from public through unsecured non-convertible debentures and whether it borrows from its shareholders in case it''s a public limited company. The report must also mention whether the company has defaulted in paying to its depositors the interest and/or principal amount. Besides, it must include capital adequacy ratio of certain kinds of NBFCs. In case of NBFCs which do not accept public deposits, auditor will have to state in the report whether the board has passed the resolution for non-acceptance of public deposited and whether the company has accepted any such borrowings
RBI official said, the new directions have not been issued because of ongoing global financial crisis but are a rejig of the existing norms. The direction also asked the auditors of public deposit taking NBFC to mention in the report whether it borrows from public through unsecured non-convertible debentures and whether it borrows from its shareholders in case it''s a public limited company. The report must also mention whether the company has defaulted in paying to its depositors the interest and/or principal amount. Besides, it must include capital adequacy ratio of certain kinds of NBFCs. In case of NBFCs which do not accept public deposits, auditor will have to state in the report whether the board has passed the resolution for non-acceptance of public deposited and whether the company has accepted any such borrowings
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