The Reserve Bank of India (RBI) has ordered a special audit of Bank of Rajasthan (BoR) accounts following reports of irregular dealings by the bank.
The regulator has appointed Deloitte Haskins & Sells to audit the bank's lending policy while it has hired the parent accounting and consulting firm Deloitte Touche Tohmatsu to audit the information security system of the bank.
The RBI orders special audits only in rare cases and only under exceptional circumstances.
BoR was in the news a week ago after the central bank's imposition of a Rs25-lakh fine on the bank following revelation of a series of violations. The bank was pulled up by the RBI following violations in property transactions, anti-money laundering norms, irregularities in the accounting of a corporate group and failure to provide certain documents sought by the RBI.
The bank's unprofessional corporate governance has prompted the central bank to order a special audit with one of the concerns being the presence of S K Tayal, a relative of promoter P K Tayal on the bank's credit committee and board of directors.
Unlike in other commercial banks where different credit committees sanction loans depending on loan size, BoR has a single committee for approval of loans of even above Rs50 crore which in other banks goes right up to the management committee for approval.