Para 6.3.2 — MSO (Audit)
Original Rule Text
6.3.2 The primary objective of inspection by the Indian Audit and Accounts Department is to assist the banks and the Government in establishing a system of sound functioning, strictly in accordance with the prescribed rules, in so far as Government transactions are concerned. This inspection is therefore intended to supplement, and not replace, the audit or inspection arrangements existing in these banks. Apart from undertaking any special enquiries that Government may desire, the audit staff of the Comptroller and Auditor General can do no more than check generally that the rules prescribed by the Government are observed.
What This Means
The primary goal of CAG's inspection of public sector banks is to assist banks and the government in ensuring sound functioning of government transaction processes according to prescribed rules. This inspection supplements (does not replace) the bank's own audit arrangements. The audit staff checks generally whether government-prescribed rules are being observed but does not take over the bank's internal audit function.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Primary objective is assisting banks and government in sound functioning
- 2Inspection is limited to government transactions, not general banking operations
- 3CAG inspection supplements, does not replace, the bank's own audit
- 4Audit staff checks general compliance with government-prescribed rules
- 5Special enquiries can be undertaken if Government desires
Practical Example
During inspection of Punjab National Bank's government business branch, the CAG audit party checks whether pension payments are being released according to government rules and whether challans are being processed within prescribed timelines. They do not audit the bank's commercial lending or deposit operations — that remains the responsibility of PNB's own auditors and the RBI.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Does this mean the CAG's audit replaces the bank's internal audit?▼
Can the CAG audit general banking operations during these inspections?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.