Kindly refer to the guidelines issued for external auditors in terms of Section 35(3) of BCO, 1962 vide BID Circular No. 5 of 1972 and subsequent instructions on the subject.

            In addition to the items being presently covered in the special reports submitted by the auditors of banks to the State Bank, the auditors may be requested to include their observations on the level of efficiency of the internal audit department. For the purpose of evaluating efficiency audit reports of internal auditors should be scrutinised through conducting independent test audit and comparing results with the audit conducted by internal audit teams.

            A copy of this circular may please be delivered to your auditors for necessary compliance.

            Please acknowledge receipt.