- [(1) The balance-sheet and profit and loss account prepared in accordance with section 29 shall be audited by a person duly qualified under any law for the time being in force to be an auditor of companies.] [Substituted by Act 58 of 1968, Section 8, for sub-Section (1) (w.e.f. 1.2.1969).][(1-A) Notwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company shall, before appointing, re-appointing or removing any auditor or auditors, obtain the previous approval of the Reserve Bank.(1-B) Without prejudice to anything contained in the Companies Act, 1956 (1 of 1956), or any other law for the time being in force, where the Reserve Bank is of opinion that it is necessary in the public interest or in the interest of the banking company or its depositors so to do, [it may at any time by order direct that a special audit of the banking company's accounts, for any such transaction or class of transactions or for such period or periods as may be specified in the order, shall be conducted and may by the same or a different order either appoint a person duly qualified under any law for the time being in force to be an auditor of companies or direct the auditor of the banking company himself to conduct such special audit] [Inserted by Act 58 of 1968, Section 8 (w.e.f. 1.2.1969).] and the auditor shall comply with such directions and make a report of such audit to the Reserve Bank and forward a copy thereof to the company.(1-C) The expenses of, or incidental to, [the special audit] [Substituted by Act 66 of 1988, Section 9, for certain words (w.e.f. 30.12.1988).] specified in the order made by the Reserve Bank shall be borne by the banking company.](2)The auditor shall have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities and penalties imposed on, auditors of companies by [section 227 of the Companies Act, 1956 (1 of 1956)] [Substituted by Act 95 of 1956, Section 14 and Sch., for " Section 145 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14.1.1957).], [and auditors, if any, appointed by the law establishing, constituting or forming the banking company concerned.] [Inserted by Act 66 of 1988, Section 9 (w.e.f. 30.12.1988).](3)In addition to the matters which under the aforesaid Act the auditor is required to state in his report, he shall, in the case of a banking company incorporated [in India] [Substituted by Act 20 of 1950, Section 3, for " in the State" .], state in his report,-(a)whether or not the information and explanation required by him have been found to be satisfactory;(b)whether or not the transactions of the company which have come to his notice have been within the powers of the company;(c)whether or not the returns received from branch offices of the company have been found adequate for the purposes of his audit;(d)whether the profit and loss account shows a true balance [of profit or loss] [Substituted by Act 55 of 1963, Section 15,for " of profit and loss" (w.e.f. 1.2.1964).] for the period covered by such account;(e)any other matter which he considers should be brought to the notice of the shareholders of the company.
