Home › Circulars › RBI/2013-14/638

IS Audit Mandated for Urban Cooperative Banks

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2013-14/638 · issued 11 Jun 2014 · ~2 min read

Quick answerRBI directs all Primary Urban Cooperative Banks to adopt an Information System (IS) audit policy, conduct annual IS audits for critically important branches, and place reports before the board. Compliance required by March 31, 2015.

The rule, in the simplest words

All Primary Urban Cooperative Banks must adopt an Information System (IS) audit policy tailored to their operations.
Annual IS audits must be conducted for all critically important branches, preferably before the statutory audit.
IS audit reports must be placed before the board and compliance ensured within the timeline set in the audit policy.

How it plays out — a real example

As a co-operative bank branch officer in Indore, Rohan ensures that the bank's Information System (IS) audit policy is up-to-date and aligned with our operations. He conducts annual IS audits for our critically important branches, reviewing our electronic banking and CBS systems for security and compliance. Rohan places the IS audit reports before the board, ensuring that we meet the timeline set in our audit policy. This helps us protect both the bank and our customers from potential risks associated with technology adoption.

What changed

RBI has formally introduced IS audit requirements for UCBs, replacing the earlier EDP audit advisory from 2002. Banks must now adopt an IS audit policy tailored to their operations and conduct annual audits covering critical branches, with reports available to statutory auditors before their audit.

What it means for you

UCBs must integrate IS audit into their risk management framework due to increased technology adoption and associated risks. This ensures that electronic banking, CBS, and other digital services are audited for security and compliance, protecting both the bank and its customers.

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

Adopt or update an IS audit policy aligned with your bank's size, business complexity, and computerization level.
Conduct annual IS audits for all critically important branches, preferably before the statutory audit.
Place IS audit reports before the board and ensure compliance within the timeline set in the audit policy.
Implement these instructions by the end of the current accounting year (March 31, 2015).

Who it affects

All Primary (Urban) Cooperative Banks, Chief Executive Officers of UCBs, Statutory auditors of UCBs, Board of Directors of UCBs

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-18 09:22 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

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

What is the key difference between the earlier EDP audit and the new IS audit requirement?

The earlier 2002 circular advised UCBs to introduce EDP audit on a perpetual basis. The new circular specifically mandates an IS audit policy, annual audits for critical branches, and board oversight, reflecting the increased technology risks from CBS and digital banking.

Which branches must be covered under the annual IS audit?

All critically important branches, defined by the nature and volume of business, must be audited annually. The audit should be completed before the statutory audit so that findings are available to statutory auditors.

What is the deadline for implementing these IS audit instructions?

UCBs must implement these instructions during the current accounting year, which runs from April 1, 2014, to March 31, 2015.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #70: UBD.BPD.Cir.No.71/12.09.000/2013-14 — "Introduction of Information System (IS) Audit for Urban Cooperative Banks" dated June 11, 2014”

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

RBI/2013-14/638

 UBD.BPD.Cir.No. 71/12.09.000/2013-14

 June 11, 2014

 The Chief Executive Officer

 All Primary (Urban) Co-operative Banks

 Introduction of Information System(IS) Audit for Urban Cooperative Banks 

 Please refer to our circular UBD No.POT.PCB.30/09.96.00/2001-02 dated February 12, 2002 advising UCBs to introduce EDP audit system on perpetual basis. It is observed that since then some of the UCBs have adopted technology and have been offering electronic banking, tele banking, electronic clearing/funds transfer, electronic money, smart cards etc to its customers. With a view to integrating the range of services offered by bank branches, providing better customer services, generating MIS reports and various reports for regulators and Government of India, Reserve Bank of India has vide Circular UBD CO BPD PCB Cir No 14/09.18.300/2013-14 dated September 11, 2013 prescribed a calibrated timeline for implementation of CBS for UCBs based on their deposit size.

 In view of the above and having regard to risks emanating from adoption of technology, there is a need to introduce IS Audit in UCBs. It is, therefore, advised that

 UCBs may adopt an IS audit policy, if not already done, appropriate to its level of operations, complexity of business and level of computerization and review the same at regular intervals in tune with guidelines issued by RBI from time to time.

 UCBs may also adopt appropriate systems and practices for conducting IS audit on annual basis covering all the critically important branches (in terms of nature and volume of business).

 Such audits should be undertaken preferably prior to the statutory audit so that IS audit reports are available to the statutory auditors well in time for examination and for incorporating comments, if any, in the audit reports.

 IS audit reports should be placed before the board and compliance should be ensured within the time frame as outlined in the audit policy.

 The above instructions may be implemented during the current accounting year i.e April 1, 2014 to March 31, 2015.

 Yours faithfully,

 (Scenta Joy)

 General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/638 · issued 11 Jun 2014. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 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=8937&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.