Answer-Under Section 30(1B) of the Banking Regulation Act, 1949, the Reserve Bank may direct that a special...

Section 301C, inserted by the Banking Law Amendment Act, 1968 Act 58 of 1968, provides that the expenses of, or incidental to, the special audit specified in the order made by the Reserve Bank shall be borne by the banking company. Section 301B empowers the RBI to direct a special audit in the public interest or in the interest of the banking company or its depositors. The RBI may either appoint a person duly qualified as an auditor of companies or direct the existing auditor to conduct the special audit. The auditor must comply with the RBIs directions, make a report of such audit to the Reserve Bank, and forward a copy to the banking company. The allocation of audit expenses to the bank ensures accountability for the costs arising from the supervisory process.

Question

Under Section 30(1

B of the Banking Regulation Act, 1949, the Reserve Bank may direct that a special audit of a banking company’s accounts be conducted. Under Section 30(1
C , the expenses of or incidental to the special audit as specified in the Reserve Bank’s order shall be borne by: