The Reserve Bank of India (RBI) has asked urban co-operative banks to introduce concurrent audit with immediate effect.
The measure comes in the wake of serious financial lapses, that undermined depositor interest of some banks in the last three years.
Till date, only urban co-operative banks with deposits of over Rs 50 crore were subject to concurrent audit.
Among others, the broad areas to be covered by the concurrent audit are cash, investments, deposits, advances, house keeping and forex transactions.
The Joint Parliamentary Committee (JPC) which enquired into the stock market scam of 2001 had recommended such a belt tightening measure.
The JPC had found that the management of the now infamous Madhavpura Mercantile Co-operative Bank had jeopardised depositors
