Recorded RBI impact
Directive prohibition
Directive prohibition · Fresh imposition
Published by RBI
12 Oct 2021
Case Brief
RBI, acting under section 45MAA of the RBI Act, 1934, passed an order dated September 23, 2021 debarring M/s Haribhakti & Co. LLP, Chartered Accountants, from undertaking any type of audit assignment in any entity regulated by RBI for two years, with effect from April 1, 2022. RBI said the debarment was imposed because the firm failed to comply with a specific direction issued by RBI in respect of its statutory audit of a systemically important non-banking financial company. The release also clarifies that the order will not affect the firm's audit assignments in RBI-regulated entities for FY 2021-22.
Why RBI Acted
By order dated September 23, 2021, RBI debarred M/s Haribhakti & Co. LLP, Chartered Accountants from undertaking any type of audit assignment in any RBI-regulated entity for a period of two years, effective April 1, 2022. The action was taken because the firm failed to comply with a specific direction issued by RBI in connection with its statutory audit of a Systemically Important Non-Banking Financial Company, under section 45MAA of the RBI Act, 1934.
Operating Impact
With effect from April 1, 2022, the audit firm cannot take up any audit assignments in RBI-regulated entities for two years. RBI-regulated entities that might otherwise engage the firm must avoid appointing it during the debarment period, though FY 2021-22 assignments are not impacted.
Regulatory Basis
- section 45MAA of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Directive prohibition
- Order Date
- 23 Sept 2021
- Effective From
- 1 Apr 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC