What changed
RBI had earlier asked UCBs to verify all beneficiaries under ADWDRS 2008 and list eligible ones missed. Now, noting a wide divergence between error rates in CAG's sample audit and banks' own checks, the government has desired that all banks submit their auditors' certificates regarding the re-verification exercise. UCBs must submit these certificates to their regional office by October 15, 2013.
What it means for you
UCBs face tighter scrutiny on the ADWDRS 2008 implementation. The government is not satisfied with banks' self-verification quality, so an independent auditor's sign-off is now mandatory. The divergence in error rates suggests some banks may have under-reported mistakes.
What you must do
- Complete the re-verification of all ADWDRS 2008 beneficiaries immediately if not already done.
- Engage an auditor to certify the accuracy of the re-verification exercise.
- Submit the auditor's certificate to the concerned RBI Regional Office on or before October 15, 2013.
- Ensure the certificate covers both the verification of existing beneficiaries and the list of eligible beneficiaries who were missed.
Who it affects
All Primary (Urban) Co-operative Banks, Auditors of UCBs, RBI Regional Offices handling UCB supervision
Why is RBI asking for auditor certificates now?
Because the government found a wide divergence between the percentage of errors in CAG's sample audit and the percentage of errors banks reported in their own verification, indicating possible under-reporting.
What is the deadline for submitting the auditor certificate?
The certificate must be submitted to the concerned RBI Regional Office on or before October 15, 2013.
What happens if a UCB fails to submit the certificate on time?
The circular does not specify penalties, but RBI expects timely submission to apprise the government.