The Reserve Bank of India (RBI) on Wednesday directed non-banking financial companies (NBFCs) and urban cooperative banks (UCBs) to implement a risk-based internal audit (RBIA) system. All non-deposit taking NBFCs with asset size of Rs 5,000 crore and above, all deposit-taking NBFCs irrespective of their size and all primary UCBs with asset size of Rs 500 crore and above will have to migrate to the new system, the regulator said.
“In order to ensure smooth transition from the existing system of internal audit to RBIA, the concerned NBFCs and UCBs may constitute a committee of senior executives with the responsibility of formulating a suitable action plan,” the RBI said. The committee may address transitional and change management issues and should report progress periodically to the board and senior management, it said.