The Reserve Bank of India (RBI) on February 3, 2021 issued guidelines on a risk-based internal audit system (RBIA framework) for non-banking financial companies (NBFCs) and urban cooperative banks (UCBs).
- The RBIA framework will be for all deposit taking NBFCs, irrespective of their sizes, all non-deposit taking NBFCs (including core investment companies) with an asset size of Rs. 5,000 crore and also for all UCBs, having an asset size of Rs.500 crore and above.
- A risk-based internal audit (RBIA) is a method of linking an organisation’s overall risk management framework, which would provide assurance to the board of directors and the senior management on the quality and effectiveness of the organization’s internal controls.
- The entities have to implement the RBIA framework by March 31, 2022, and have been asked to constitute a committee of senior executives, to be entrusted with the responsibility of formulating a suitable action plan.
