HDFC Bank Friday picked MSKA & Associates as its statutory auditor for a period of four years, subject to Reserve Bank of India's (RBI) and its shareholders' approval, the bank said in a regulatory filing.
The move comes after the apex bank earlier this week banned the audit firm SR Batliboi & Company, a member firm of EY, for one year from auditing commercial bank books, after RBI found lapses in a statutory audit.
The auditor was earlier proposed to be re-appointed by HDFC's board of directors as the bank's statutory auditor for three years with effect from FY 2019-20, subject to the RBI and shareholder's approval.
"Accordingly, the bank cannot appoint S.R. Batliboi as the statutory auditor of the bank as was earlier proposed. Consequently, the board of directors of the bank has today approved the appointment of MSKA & Associates, Chartered Accountants (Firm Registration No: 105047W) as the statutory auditors of the bank for a period of 4 (four) years with effect from FY 2019-20," HDFC said in its filing.
The RBI had banned S.R. Batliboi on account of lapses found in a separate statutory audit assignment carried out by it.
"On account of the lapses identified in a statutory audit assignment carried out by the firm, M/s S.R. Batliboi & Co. Llp., chartered accountants, it has been decided that RBI will not approve the said firm for carrying out statutory audit assignments in commercial banks for one year starting from April 1, 2019," the regulator said in a statement.
Audit firm SR Batliboi & Co audited more than 250 companies in fiscal 2018, a majority of them belonged to other fund based financial services (as per CMIE classification) with banking services firms managing a share of 3 per cent.
According to the CMIE data, the firm has been the auditor in less than 10 banks for the past five years. In FY18, it audited 8 banks compared to 6 in the previous fiscal.Currently, only foreign and private banks are audited by this firm. Of the eight banks audited in 2017/18, four were foreign banks such as Mizuho Bank, Barclays Bank Plc; three were private sector lenders namely Axis Bank, Kotak Mahindra Bank and South Indian Bank and one payments bank, Aditya Birla Idea Payments Bank. SR Batliboi has also audited books of ICICI Bank and Yes Bank in the past.