RBI Guidelines on Central/ Branch Audit Fee Structure of Banks (including for LFAR, Certification, etc.) were last revised by RBI in June 2013 (i.e. applicable from FY 2012-13 onwards). Same rates of Audit Fee are applicable for Bank/ Branch Audits of FY 2021-22 as well.
RBI Notification dt. 25/06/2013 : Bank Branch Audit Fee Structure applicable from FY 2012-13 onwards (including FY 2021-22)
Structure of Fee Payable to Statutory Central/ Branch Auditors (SCAs/ SBAs) of Public Sector Banks from FY 2012-13 onwards (including FY 2021-22)
A. Central Audit Fee/ Remuneration
i) For work relating to Scrutiny and incorporation of returns of branches:
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.
ii) For work relating to Audit of the Head Office/ Central Office as an accounting unit:
|Category of banks|
(on the basis of balance sheet size)
|Rate of audit|
|Up to Rs. 50,000 crore||706,200/-|
|Above Rs. 50,000 crore and up to Rs.100,000 crore||783,200/-|
|Above Rs.100,000 crore and up to Rs.200,000 crore||842,600/-|
|Above Rs.200,000 crore and up to Rs.500,000 crore||902,000/-|
|Above Rs.500,000 crore||961,400/-|
The total remuneration under above two heads will be divided equally among all the statutory central auditors of the bank concerned. Further, 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 based on the quantum of advances.
B. Branch Audit Fee/ Remuneration
|Category of bank branch|
(on the basis of quantum of advances)
|Rates of audit fees (Rs.)|
|Up to Rs.10 crore||40,250/-|
|Above Rs.10 crore up to Rs. 20 crore||57,500/-|
|Above Rs. 20 crore up to Rs. 30 crore||79,350/-|
|Above Rs.30 crore up to Rs. 50 crore||120,750/-|
|Above Rs.50 crore up to Rs. 75 crore||138,000/-|
|Above Rs.75 crore up to Rs.125 crore||182,850/-|
|Above Rs.125 crore up to Rs.175 crore||228,850/-|
|Above Rs.175 crore up to Rs.300 crore||287,500/-|
|Above Rs.300 crore up to Rs.500 crore||324,300/-|
|Above Rs.500 crore up to Rs.1,000 crore||359950/-|
|Above Rs.1,000 crore up to Rs.5,000 crore||395,600/-|
|Above Rs.5,000 crore||431,250/-|
The main operating office of the bank (irrespective of the fact whether it is attached to Head Office/ Central Office of the bank or functions as a separate unit), CPUs/ LPUs/ Other Centralized hubs (called by whatever nomenclature), which are taken up for the purpose of statutory branch audit during a particular year so as to cover 90% of advances of a bank, will 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, etc. 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. LFAR Fees
The scales of fees for LFAR are as under:
|Fees for LFAR||Rate|
|Head Office / Controlling Offices||25% of the basic audit fee excluding fee for scrutiny and incorporation of branch returns.|
|Branches||10% of the basic audit fee payable for audit of respective branch.|
In respect of branches below the cut-off point of the threshold limit of branches to be taken up for statutory audit, where LFARs and other certifications are required to be submitted by the concurrent auditors, the fees payable to the concurrent auditors may be based on the above prescription.
D. Additional Certifications Fee
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.
xiii) As hitherto, no fee is payable to branch auditors for additional attestations.
E. Additional Certifications Fee (SEBI)
As regards fee for additional certificates/ attestations prescribed by SEBI and other regulators, the banks may decide for remuneration thereof in consultation with the Audit Committee of the Board/ Board.
F. Audit Fees for Consolidated Financial Statements
For this purpose banks may pay a maximum of Rs. 20,625 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. Audit 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 2012-13 onwards.
The concurrent auditors assisting the review process may continue to be paid a reasonable token fee as advised in RBI circular letter DBS.ARS.No.BC.17/ 08.91.001/2002-03 dt. 05/06/2003.
H. Reimbursement of Travelling/ Halting/ Conveyance Charges
i) For reimbursement of the lodging & boarding charges, travelling allowance and daily conveyance payable to statutory auditors, the banks/ auditors are given the discretion to mutually decide the same in a cost effective manner. However, in no circumstances such rates should exceed the IBA prescribed ceiling/ limit, as under:
|Category of Audit officials||Equivalent scale of Bank officials (as per IBA)|
|Partners/proprietors||VII – General Manager|
|Qualified Assistants||III – Senior Manager|
|Un-Qualified Assistants||I – Officers|
ii) With regard to the reimbursement of travelling, halting allowance and daily conveyance charges, following observations of RBI may be noted:
(a) Wherever banks have Guest House or Visiting Officers’ Flats, the same may be utilized to cater to the needs of the auditors.
(b) 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.
(c) 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.
(d) 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.
(e) The TA/ HA should be kept to the minimum.
(f) 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.
g) No separate TA/ HA shall be payable for LFAR/ Tax Audit of Head/ Controlling Offices and branches.