Reserve Bank of India Act, 1934 | Chapter IV

Sections 51 and 52: Appointment of Special Auditors, Powers and Duties

Sections 51 and 52 of the Reserve Bank of India Act, 1934 govern independent scrutiny of the Reserve Bank of India's accounts. Section 51 empowers the Central Government to arrange a special examination by the Comptroller and Auditor General, while Section 52 sets out auditors' access, examination and reporting duties.

Section 51 - Appointment of special auditors by Government

The Central Government may at any time appoint the Comptroller and Auditor General (CAG) to examine and report upon the accounts of the RBI. The words without prejudice to Section 50 mean this special examination is additional to, rather than a replacement for, the ordinary audit arrangement under Section 50, under which the Central Government appoints the RBI's auditors.

The provision creates a discretionary power of appointment; it does not state that the CAG must conduct every annual RBI audit.

Section 52 - Powers and duties of auditors

Examination and access under subsection (1)

Each auditor must receive the RBI's annual balance-sheet and examine it with the related accounts and vouchers. The auditor is entitled to a list of books maintained by the Bank and access at reasonable times to its books, accounts and other documents. At the RBI's expense, an auditor may engage accountants or other assistants for investigating accounts and may examine a director or officer in connection with those accounts.

Report to the Central Government under subsection (2)

The auditors must report on the annual balance-sheet and accounts. Their report must address whether the balance-sheet is complete, fairly presented, contains the necessary particulars and properly reflects a true and correct view of the RBI's affairs. If explanations or information were sought from the Central Board, the report must also indicate whether these were supplied and whether they were satisfactory.

Meaning of key terms

Annual balance-sheet: the financial statement showing the Bank's assets and liabilities at the reporting date. Vouchers: supporting records evidencing transactions entered in the accounts. Central Board: the RBI's governing board constituted under the Act. Special auditor: in Section 51, the CAG when appointed by the Central Government for the specified examination.

How Sections 50, 51 and 52 work together

Section 50: provides for appointment, remuneration and term of ordinary auditors.
Section 51: permits an additional CAG examination and report at the Central Government's discretion.
Section 52: sets out the examination, information-access and reporting framework for auditors.

Statutory text: Sections 51 and 52

Section 51 - Appointment of special auditors by Government

Without prejudice to anything contained in section 50, the Central Government may at any time appoint the Comptroller and Auditor General to examine and report upon the accounts of the Bank.

Section 52 - Powers and duties of auditors

(1) Every auditor shall be supplied with a copy of the annual balance-sheet, and it shall be his duty to examine the same, together with the accounts and vouchers relating thereto ; and every auditor shall have a list delivered to him of all books kept by the Bank, and shall at all reasonable times have access to the books, accounts and other documents of the Bank, and may, at the expense of the Bank, employ accountants or other persons to assist him in investigating such accounts, and may, in relation to such accounts, examine any Director or officer of the Bank.

(2) The auditors shall make a report to the Central Government upon the annual balance-sheet and accounts, and in every such report they shall state whether, in their opinion, the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the State of the Bank's affairs, and, in case they have called for any explanation or information from the Central Board, whether it has been given and whether it is satisfactory.

Official legislation and regulatory resources

Read the relevant financial year's accounts, auditor reports and the Act as amended for the applicable period. This explanation distinguishes the statutory power to appoint the CAG from any actual appointment made under it.