Thought leadership

Internal audit hot topics for the banking sector in India

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The rise of digital transformation, blockchain solutions, robotic process automation (RPA) and advancements in machine learning/artificial intelligence (AI) has introduced fresh perspectives to banking businesses over the last year. As the business landscape undergoes a paradigm shift and frameworks continue to evolve, internal audit adapts to this dynamic environment by realigning its strategies to suit the demands of the digital era and adopting a proactive stance. An analysis of the fines levied on financial institutions over the last two financial years helps us understand the areas of regulatory focus which consequently become hot topics for internal auditors.

Key highlights of the publication:

  • Recent trends in the internal audit landscape have surfaced due to two pivotal factors - both intertwined with the current Indian financial and economic landscape and global geopolitical scenarios.
  • The RBI has rigorously monitored the banks through periodic inspections to verify their adherence to relevant regulations. An independent assessment done by Grant Thornton Bharat on the penalties levied by RBI through a review of the press releases in FY 23-24 has shown that the cumulative amount of penalties levied on banks in India is est. INR 44 crore.
  • On further analysis, it has been noted that while penalties have been levied across the private sector, public sector, cooperative and small finance banks, the regulatory areas of concern are often similar and reflect the key focus areas of RBI in line with the emerging risks as seen globally and in the Indian economy.