What changed
RBI issued a follow-up to its December 20, 2010 circular on intermediary accounts. Banks are now required to submit a covering letter certifying that the quarterly concurrent auditor certificate covers all intermediary accounts maintained with the bank.
What it means for you
This adds an extra compliance layer for banks handling intermediary accounts for electronic payments. Banks must ensure their concurrent auditors verify completeness of account coverage, reducing risk of unmonitored intermediary transactions.
What you must do
- Update internal processes to include a covering letter with each quarterly concurrent auditor certificate.
- Ensure your concurrent auditor reviews all intermediary accounts before certification.
- Maintain a complete register of all intermediary accounts to support the certification.
- Train compliance teams on the new covering letter requirement.
Who it affects
Scheduled commercial banks, Concurrent auditors of banks, Compliance departments handling intermediary accounts
When does this requirement take effect?
The circular is dated December 28, 2010, and the requirement applies from that date.