The Reserve Bank of India’s (RBI) spate of new measures on auditor appointment allude that RBI is worried about audit quality. Having taken the flak for a series of bank and NBFC failures, there has been a steady but rising groundswell of opinion questioning the regulatory oversight that RBI has provided: be it the failures themselves, to how banks undertake their asset quality review and report divergences, or the recent spate of regulatory violations by private sector banks that have raised questions on the strength of their processes and risk management.

RBI’s concerns are valid, but the new measures are unlikely to improve overall audit quality.

To read why, read our blog ‘RBI on auditor appointments: The slip between the cup and the lip’ by clicking here