RBI vide Notification No: RBI/2013-14/638 UBD.BPD.Cir.No. 71/12.09.000/2013-14 dt.June 11, 2014 has notified All ‘Primary (Urban) Co-operative Banks’, to introduce Information System (IS) Audit for Urban Cooperative Banks in India.
Over the years, UCB’s in India have moved away from paper based banking to electronic banking. The full suite of electronic banking viz ATMs’ Online Banking, Mobile Banking, Online Payments, Smart cards were being offered to UCB customers.
For a holistic delivery of services to customers and also to enable automaton of various reports, Reserve Bank of India vide Notification dt. September 11, 2013 had prescribed a calibrated timeline for implementation of CBS for UCBs based on their deposit size.
In view of the above and having regard to risks emanating from adoption of technology, there is a need to introduce IS Audit in UCBs. Hence, RBI has advised UCBs as under:
01)UCBs may adopt an IS audit policy, if not already done, appropriate to its level of operations, complexity of business and level of computerization.
02)UCBs may also adopt appropriate systems and practices for conducting IS audit on annual basis covering all the critically important branches (in terms of nature and volume of business).
03)It is further advised that the IS audits be undertaken preferably prior to the statutory audit so that IS audit reports are available to the statutory auditors well in time for examination and for incorporating comments, if any, in the audit reports.
The above instructions to be implemented during the current accounting year i.e April 1, 2014 to March 31, 2015.