IBA Recommends Public Sector Banks to Reduce Ambit of Physical Branch Audits to 50% of Total Business :

The Indian Banks' Association has issued an advisory dated September 15, 2026, for the Chairman of the State Bank of India and MDs & CEOs of all Public Sector Banks, drawing attention to the Banking Laws (Amendment) Act, 2025, notified vide a Notification dated April 15, 2025, which has granted authority to all the Public Sector Banks (PSBs) and the Securities and Exchange Board of India (SEBI) to provide remuneration to statutory auditors, encouraging engagement of high-quality audit professionals and improving audit standards.

In the context of this update, the Government of India has issued several Gazette Notifications, and key changes have been introduced to the State Bank of India Act, 1955.

Therefore, the Reserve Bank of India (RBI), through a letter issued on April 17, 2026, addressed to the SBI Chairman and MD & CEOs of all the nationalised banks, has revoked its instructions concerning auditor fee structures with immediate effect.

The RBI's letter has stated to keep the remunerations/fees reasonable and commensurate. Vide the present advisory, all the concerned banks are advised to adopt the following structural and policy measures:

According to the instructions of RBI issued on March 01, 2023, no changes have been made to the audit remuneration for the financial year 2026-27.

All the concerned public sector banks are instructed to reduce the scope of their physical statutory branch audits to just 50% of the total business/advances (earlier it was at least 70%).

Indian Banker Association recommends that Public sector Banks should reduce physical branch audits to cover only 50% of total business. https://t.co/BDZjtDucRy

— October 16, 2026

Refer to the official advisory for complete information.