RBI bars Haribhakti & Co from auditing for two years

The Reserve Bank of India has barred Haribhakti & Co from undertaking any type of audit assignments in the entities regulated by the central bank for a period of two years, effective 1 April 2022. 

This is the first such debarment under Section 45 MAA of the RBI Act 1934, which deals with the powers and duties of auditors.

“This action has been taken on account of the failure on the part of the audit firm to comply with a specific direction issued by RBI with respect to its statutory audit of a Systemically Important Non-Banking Financial Company,” RBI said in a circular on Tuesday.

Haribhakti was the auditor for Srei Infrastructure Finance Ltd & Srei Equipment Leasing till September 2022. RBI had recently superseded the boards of these two companies owing to governance concerns and defaults by the companies in meeting payment obligations.

The current ban will not impact audit assignments of Haribhakti & Co. LLP in RBI regulated entities for the financial year 2021-22, it said.

Haribhakti is the auditor for Axis Bank, RBL Bank, and Indusind Bank.