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Reserve Bank of India (RBI) has asked the banks to do legal audits of loan accounts over Rs 5 crore on a quarterly basis. It has also asked banks to do re-verification of title deeds with the respective authorities as part of the regular audit exercise till the loan was fully repaid.
The review note should be furnished to the board or audit committee of the board at quarterly intervals, RBI said.
The review note should mention the number of loan accounts due for legal audit for the quarter and how many accounts were covered, said RBI. It should also mention the list of deficiencies observed by the auditors and steps taken to rectify these, central bank said.
Banking regulator also directed that where it should disclose the number of accounts in which the rectification could not take place and what course of action is taken to safeguard the interest of bank in such cases. The review note should also mention, “the action taken on issues pending from earlier quarter” RBI said.
