Home › Circulars › RBI/2006-2007/429

Revised Auditor Remuneration for Public Sector Banks from FY 2006-07

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2006-2007/429 · issued 06 Jun 2007 · ~2 min read

Quick answerRBI revised fees for statutory central and branch auditors of public sector banks effective FY 2006-07. Central audit fees include Rs. 750 per branch plus a slab-based head office fee. Branch audit fees are based on advances slabs. LFAR fees set at 25% of head office basic audit fee (excluding branch return scrutiny fee) and 10% of branch basic audit fee.

The rule, in the simplest words

Central auditors get Rs. 750 for every branch of the bank, even if they don't audit that branch.
Head office audit fee depends on the bank's total assets (e.g., Rs. 5.63 lakh for small banks, Rs. 7.66 lakh for very large banks).
Branch audit fee depends on how much money the branch has lent (advances), with rates from Rs. 12,500 to Rs. 3.13 lakh.
For branches that don't give loans (like service branches), the bank must ask RBI for a special fee.
Long Form Audit Report (LFAR) fee is extra: 25% of head office fee and 10% of branch fee, with no travel allowance.

How it plays out — a real example

Ravi, the CFO of a nationalised bank with total assets of Rs. 50,000 crore, uses the new slab to calculate the head office audit fee at Rs. 6.42 lakh. He then adds Rs. 750 for each of the bank's 2,000 branches, divides the total by three central auditors, and assigns each a fee of approximately Rs. 2.14 lakh for central audit work.

What changed

RBI updated the remuneration schedule for statutory central and branch auditors of public sector banks, effective from the 2006-07 audit year. The central audit fee now includes a per-branch fee of Rs. 750 for all branches, plus a slab-based fee for head office audit based on total asset size. Branch audit fees are now determined by the quantum of advances, with a detailed slab structure up to Rs. 3.13 lakh for branches with advances above Rs. 500 crore.

What it means for you

Banks must adopt the new fee slabs for auditor appointments from FY 2006-07 onwards, ensuring compliance with RBI's revised remuneration structure. The per-branch fee for central auditors applies to all branches, regardless of audit coverage, increasing cost predictability. Branch audit fees are now directly linked to advances, requiring banks to classify branches accurately for fee calculation.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update internal policies to reflect the new auditor fee slabs for central and branch audits effective FY 2006-07.
Ensure central auditor fees are calculated as Rs. 750 per branch plus head office fee based on total asset size, divided equally among all central auditors.
Classify branches by advances quantum to apply correct branch audit fee slabs from the schedule.
For branches with no advances (e.g., service branches), propose revised fees to RBI on a case-by-case basis in consultation with the Audit Committee.
Apply LFAR fees at 25% of head office basic fee and 10% of branch basic fee, with no separate TA/HA for LFAR.

Who it affects

All nationalised banks, Associate banks of SBI, Statutory central auditors, Statutory branch auditors, Bank audit committees

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-07-29 04:02 IST
Status change: withdrawn 05 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

How is the central auditor fee calculated?

The fee is Rs. 750 per branch for all branches existing on the audit reference date, plus a head office fee based on the bank's total asset size (e.g., Rs. 5.63 lakh for assets up to Rs. 24,000 crore). This total is divided equally among all statutory central auditors.

What if a branch has no advances?

For branches like service branches or NPA recovery branches with no advances, the bank must propose a revised fee to RBI for approval, in consultation with the Audit Committee of the Board, based on business volume and existing fee.

Are there separate fees for LFAR?

Yes, LFAR fees are 25% of the head office basic audit fee (excluding branch return scrutiny fee) and 10% of the branch basic audit fee. No separate travel or halting allowance is payable for LFAR.

📜 Read the original circular — full text as issued by RBI

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 732 kb ) Remuneration payable to the Statutory Central and Branch Auditors of Public Sector Banks from the year 2006-07 RBI/2006-2007/429 DBS.ARS.No.BC. 08 / 08.92.001/ 2006-07 June 6, 2007 CONFIDENTIAL The Chairman & Managing Director, all Nationalised Banks and The Managing Director, Associate Banks of SBI Dear Sir, Remuneration payable to the Statutory Central and Branch Auditors of Public Sector Banks from the year 2006-07 Please refer to our instructions on the captioned subject, contained in our circular DBS.ARS.No.BC.7 / 08.92.001/ 2003-04 dated March 17, 2004 . It has been decided to revise the remuneration payable to the statutory central and branch auditors of public sector banks from the year 2006-07. A. Remuneration for Central Audit work of the bank As hitherto, for fixing the remuneration, specific areas of work of the auditors, which have to be taken into account, shall continue to be : (a) scrutiny and incorporation of returns of branches and (b) audit of the Head/Central Office as an accounting unit. Regarding (a) above, the fees admissible to the statutory central auditors has been fixed at Rs. 750/- per branch in respect of all the branches of the bank in existence as on the date of reference for the audit, irrespective of the fact whether the branches have been taken up for audit or not. As regards (b) above, the fees admissible will be as under : Category of banks (on the basis of total asset size) Rate of audit fees (Rs.) Upto Rs 24,000 crore 5,63,000/- Above Rs.24,000 crore and upto Rs.30,000 crore 5,87,000/- Above Rs.30,000 crore and upto Rs.40,000 crore 6,18,000/- Above Rs 40,000 crore and upto Rs 50,000 crore 6,42,000/- Above Rs. 50,000 crore and upto Rs 70,000 crore 6,72,500/- Above Rs 70,000 crore and upto Rs 90,000 crore 7,04,000/- Above Rs.90,000 crore and upto Rs.110,000 crore 7, 35,000/- Above Rs 110, 000 crore 7,66,000/- Note: The total remuneration arrived at for A (a) and A (b) above will be divided equally among all the statutory central auditors of the bank concerned. As hitherto, no separate fee will be payable to the statutory central auditors in respect of Regional, Zonal or Divisional Offices or other Controlling Offices by whatever name they are called. In case the bank intends to appoint a separate auditor for the above offices, fee paid for such auditor should be deducted proportionately from the audit fee payable to Statutory Central Auditors. B. Remuneration for Branch Audit work of the bank Category of bank branch (on the basis of quantum of advances) Rates of audit fees (Rs.) Upto Rs.75 lakh 12,500/- Above Rs.75 lakh and upto Rs.150 lakh 15,000/- Above Rs.150 lakh and upto Rs.300 lakh 22,500/- Above Rs.3 crore and upto Rs.5 crore 30,000/- Above Rs.5 crore and upto Rs.10 crore 35,000/- Above Rs.10 crore and upto Rs.20 crore 50,000/- Above Rs.20 crore and upto Rs.30 crore 69,000/- Above Rs.30 crore and upto Rs.50 crore 1,05,000/- Above Rs.50 crore and upto Rs.75 crore 1,20,000/- Above Rs.75 crore and upto Rs.125 crore 1,59,000/- Above Rs.125 crore and upto Rs.175 crore 1,99,000/- Above Rs.175 crore and upto Rs.300 crore 2,50,000/- Above Rs.300 crore and upto Rs.500 crore 2,82,000/- Above Rs.500 crore 3,13,000/- As at present, the main operating office of the bank (irrespective of the fact whether it is attached to Head / Central Office of the bank or functions as a separate unit) may be treated as any other branch and the fees admissible for the audit work thereof will be on the basis of the above mentioned schedule. For branches where there is no advances portfolio such as service branches, specialised branches etc., or those operating as NPA recovery branches the banks, in consultation with the Audit Committee of the Board, should propose the revised fees depending on the volume of business of the branches, existing fee, etc. for the approval of RBI on a case to case basis. C. Fees for LFAR The fees for LFAR are as under: Fees for LFAR Rate Head Office / Controlling Offices 25% of the basic audit fees (excluding fees for scrutiny and incorporation of the Branch Returns) as indicated at paragraph A(b) above. Branches 10% of the basic audit fees payable for audit of respective branch as indicated at paragraph B above. No separate TA/HA shall be payable for LFAR / Tax Audit of Head / Controlling Offices and branches. D. Fees for additional certifications It has been decided that an additional remuneration @ 12% of the basic audit fees shall be payable for the following certifications/validations required to be made in terms of various circulars/guidelines issued by RBI and any other certification/validation included from time to time as per RBI requirements . i) Verification of SLR requirements under Section 24 of BR Act, 1949 on 12 odd dates in different months in a year, not being Fridays. ii) A certificate to the effect that the bank has been following RBI guidelines regarding (a) asset classification, (b) income recognition (c) provisioning, and also to the effect that the bank has followed RBI guidelines in regard to the investment transactions/treasury operations. iii) A certificate in respect of reconciliation of bank’s investments (on own account as also under PMS). iv) A certificate for compliance in key areas by the banks. v) A certificate in respect of custody of unused BR forms. vi) Authentication of bank’s assessment of Capital Adequacy Ratio in the ‘Notes on Accounts’ attached to the balance sheet and various other ratios / items to be disclosed in the ‘Notes on Accounts’. vii) Certificate regarding loan portfolio review if the bank seeks World Bank assistance (Capital Restructuring Loan). viii) Certification regarding DICGC items. ix) Verification of SLR and CRR returns submitted by the bank to RBI during the period under audit and confirming the same to RBI and the bank under audit. x) To comment upon the status of compliance by the bank as regards the implementation of the recommendations of the Ghosh Committee and the Working Group on internal controls. xi) Commenting upon the credit deposit ratio in the rural areas as per the instructions of Government of India. xii) Reporting of instances of suspected fraud if any, noticed during the course of statutory audit as per Mitra Committee Recommendations. As hitherto, no fee is payable to branch auditors for additional attestations. E. Fees for additional certifications required by Securities and Exchange Board of India (SEBI) As regards fee for additional certificates / attestations prescribed by SEBI and other regulators, the banks may decide in consultation with the Audit Committee of the Board/ Board. F. Fees for auditing of consolidated financial statements For this purpose banks may pay a maximum of Rs.18,750/- only per subsidiary / associate whose accounts are to be consolidated in the balance-sheet of a bank. The banks have freedom to offer lesser fee if the subsidiary / associate concerned is not active or is dormant. G. Fee for quarterly / half yearly limited review The fee for carrying out quarterly / half yearly limited review to be paid to statutory central auditors may continue to be 20% of the basic audit fee. It is further clarified that revised basic audit fee payable from 2006-07 will be applicable for computing the fee for limited review from the quarters ending June 30, 2007 onwards and not to the review carried out for the quarters ended June 30 / September 30 / December 31, 2006 . The concurrent auditors assisting the review process may continue to be paid a reasonable token fee as advised in our circular letter DBS.ARS.No.BC.17/ 08.91.001/2002-03 dated June 05, 2003. H. Reimbursement of Travelling and Halting Allowances and Daily Conveyance Charges a) The Lodging charges payable to the partners / proprietors of the audit firms may be paid, subject to the production of bills, linking the same to IBA approved rates for the bank officials, as under: Category of audit officials Scale & designation of bank officials (as per IBA) Partners / proprietors of audit firms (central & branch audit firms) VII – General Manager Qualified Assistants III – Senior manager Unqualified assistants I – Officers Wherever banks have Guest House or Visiting Officers’ Flats, the same may be utilized to cater to the needs of the auditors. The boarding charges after increase of 25% across the board will be as follows : Major ‘A’ Class Cities (Rs.) Area I (Rs.) Other Places (Rs.) Proprietors / Partners of the audit firm 500/- 400/- 325/- Qualified Assistants 450/- 350/- 313/- Unqualified Assistants 350/- 313/- 275/- The above boarding charges are subject to the production of bills. Where no bills are produced, boarding charges @60% of the aforementioned rates may be paid as hitherto, to cover the boarding and other incidental charges. b) Travelling allowance in respect of partners / proprietors is to be considered by allowing travel by air conditioned First class by rail or by air in economy class or actual cost of conveyance by other modes of transportation where the routes are not served by air / rail. The audit assistants are to be allowed to travel by First class / air conditioned II tier class by rail or to be reimbursed the actual cost of conveyance by other modes of transportation where the routes are not served by rail. Air fare by economy class can be considered in respect of the audit assistants as a special case, whenever considered necessary. c) The rates for daily conveyance charges may be increased from the present level by 25% for the three categories of auditors, subject to the conditions prescribed hereunder, as hitherto. i) The actual local conveyance charges incurred by auditors while working away from their headquarters for conducting the bank’s audit, not exceeding Rs.188/- per day for proprietors/partners, Rs. 94/- and Rs.75/- per day for qualified and unqualified assistants respectively, may be reimbursed on the basis of self-declaration. ii) In case of local auditors, if the distance between the auditor’s office and bank’s office/branch is beyond 8 kms, actual expenditure not exceeding Rs.188/- per day for proprietors/partners, Rs.94/- and Rs.75/- per day for qualified and unqualified assistants respectively, may be reimbursed on a self-declaration basis. iii) However, the reimbursement of such expenses shall not exceed 10% of the audit fees payable to the respective auditors . It will be observed from the foregoing that there will be no distinction between statutory central auditors and branch auditors regarding payment of branch audit fees and reimbursement of traveling, halting allowance and daily conveyance charges. 2. With regard to the reimbursement of travelling, halting allowance and daily conveyance charges, following observations may be noted: i) Banks should call for such details as are necessary for verification of bills in this regard and the statutory central auditors as well as branch auditors shall furnish such details for verification of the actual expenses. ii) Where the statutory central auditors have their headquarters at a place different from that where the Head/Central Office of the bank is situated, but have an office at the same place as the Head/Central Office of the bank, the TA/HA, if any, should be nominal for the central audit. However, to ensure the quality of audit, there should be no objection to the partners of the firm visiting the Head/Central Office of the bank as and when they deem it necessary. iii) Where the statutory central auditors or branch auditors have an office at the place where the branches/offices of the bank to be audited are situated, they will not be reimbursed TA/HA. However, local conveyance may be reimbursed as suggested at para H(c) above. iv) The TA/HA should be kept to the minimum. v) In case of dispute between the auditors and the bank regarding settlement of their bills, the CMD/MD of the bank shall be the final authority to decide the claims. The CMD/MD has to satisfy himself that the actual expenses have been incurred by a particular auditor and the claims are settled keeping in view the aforesaid RBI guidelines. Please acknowledge receipt. Yours faithfully, (P.S. Sharma) General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. All Rights Reserved. Sitemap | Disclaimer Website owned and managed by Reserve Bank of India. Contact us on helpdoc[at]rbi[dot]org[dot]in Website last updated date: Jul 28, 2026 Supports: Google Chrome 147+ | Firefox 150+ | Microsoft Edge Version 147+ | Safari 17+ Accessibility Statement | Screen Reader and Accessibility Help

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/429 · issued 06 Jun 2007. The plain-English explanation above is BankPulse’s own independent summary.

🧰 Tools — save, print, templates & related

Most relevant forInternal Audit Compliance Team Senior Management / Board Business Head / Vertical Head Branch Manager — Private Bank / SFB Branch Manager — PSU / Co-op / RRB (sanctioning powers)

🛠 Banker’s toolkit — checklists & reply templates →

Related circulars · Supervision

RBI Mandates Business Continuity Plans for All Banks OSMOS Returns Filing Deadlines Tightened Effective Quarter Ending June 2005 Fraud Classification and Reporting: 2005 Master Circular Revised Annual Reporting for Non-SSI Sick/Weak Units (Effective from period ending March 31, 2006)Protected Disclosures Scheme for Pvt & Foreign Banks

Browse all departments →

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…

BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3579&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.