What changed
RBI clarified that banks can accept compliance certification from Chartered Accountants and Cost Accountants in addition to Company Secretaries. The Annex III format for the diligence report has also been revised based on IBA suggestions.
What it means for you
Banks now have more flexibility in obtaining statutory compliance certifications from borrowers with multiple banking relationships. This reduces dependency on a single professional category and may speed up the certification process. The revised Annex III format ensures standardized reporting.
What you must do
- Consider updating internal policies to accept certifications from Chartered Accountants and Cost Accountants alongside Company Secretaries, as permitted by the circular.
- Adopt the revised Annex III format for diligence reports from borrowers under consortium/multiple banking arrangements, as provided in the circular.
- Train credit and compliance teams on the expanded list of acceptable certifying professionals.
- Ensure borrowers are informed about the updated certification requirements.
Who it affects
Scheduled commercial banks (excluding RRBs and LABs), Borrowers with consortium or multiple banking arrangements, Credit and compliance departments of banks
Can we now accept certification from any professional, or only the three specified?
Only Company Secretaries, Chartered Accountants, and Cost Accountants are acceptable as per this circular. No other professionals are mentioned.
Is the revised Annex III mandatory for all new certifications?
The circular states that Annex III has been modified and a copy is enclosed. Banks are expected to use the revised format, though the circular does not explicitly state it is mandatory.