Before the Income Tax Amendment Bill, the answer was simple. “After it there is a real confusion in the market. There are a lot of claims floating around on social media. Some say that CMAs can now do everything a CA does. Some say nothing has changed. Much of that shared is false, incomplete, or intentionally misleading.
This guide gives you the complete, accurate truth — what changed, what did not change, what CMAs can do, what only CAs can do, and why this distinction matters specifically for your loan documentation and bank audit requirements.
At Sharda Associates, a CA firm in Bhopal, Madhya Pradesh, our CA team has assisted more than 45,500 businesses in India with their financial documentation needs. We deal with bank audit requirements, statutory certification, and loan documentation weekly. We know what banks will and will not accept.
What Can a CMA Do for Bank Audits in India — The Direct Answer
In India, an ICAI-CMA registered cost and management accountant (CMA) is not permitted to conduct statutory bank audit. Chartered accountants registered with ICAI-CA are the exclusive domain of statutory bank audits, concurrent audits and branch audits of scheduled commercial banks. The Income Tax Amendment Bill has widened the CMA in certain areas of income tax. It did not extend the authority of CMA to audit of banks under Banking Regulation Act or RBI guidelines.
What the Income Tax Amendment Bill 2026 Really Said
The Particular Change That Caused the Confusion
The Income Tax Amendment Bill sought to extend the definition of “accountant” under the Income Tax Act to CMAs (Cost and Management Accountants) for certain income tax certifications and reporting. certain income tax certificates, carry out tax audit under Section 44AB and provisions under
Before the amendment, the definition of “accountant” under the Income Tax Act was limited to a CA who was enrolled with ICAI-CA. The proposed expansion would have enabled CMAs to sign certain income tax certificates, undertake tax audits under Section 44AB and offer services under various income tax provisions.
What was proposed vs what passed
And that’s where all the confusion starts. As introduced, the bill called for a sweeping expansion. The enacted law was more limited in scope than initially proposed after extended discussion, including from ICAI-CA.
The crux of the matter is that the Income Tax Amendment Bill did not have the requirements that banks bank audits, concurrent audits and statutory certifications under the Banking Regulation Act. They are subject to a totally different piece of legislation.
Why was there this confusion
The announcement of the change in the income tax bill led to a flurry of social media content, much of it inaccurate, claiming CMAs could now do “everything a CA does.” This is false, when it was written and still is.
One such act is Income Tax Act. Bank audit authority is given by Banking Regulation Act 1949 , RBI guidelines and Companies Act 2013 . The change in accounting for income tax has nothing to do with the eligibility of a bank audit. That is regulated by completely different legislation.
The Three Types of Bank Audits: Who Can Do Each
Who Can Conduct Any of the Three Types of Bank Audits audit, and special audits. All three require a CA registered with ICAI-CA. CMAs are not eligible for any of these three categories In India, there are mainly three types of Bank Audits which are as under: Statutory Audit, Concurrent Audit and Special Audits. RBI guidelines and the Banking Regulation Act 1949.
Type 1 — Statutory Bank Audit
What It Is
The annual audit of a bank’s financial statements required under the Banking Regulation Act 1949. This is the primary audit that certifies whether a bank’s financial statements give a true and fair view.
Who Can Do It
Only firms of chartered accountants empanelled with RBI. The empanelment is specifically for CA firms — not CMA firms. RBI’s empanelment criteria include minimum number of CA partners, audit experience in banking sector, and ICAI-CA registration.
Current Status After Income Tax Bill
Unchanged. CMAs cannot conduct statutory bank audits. No legislative change has altered this position.
Type 2 — Concurrent Audit
What It Is
An ongoing real-time internal audit of bank branch transactions conducted alongside operations — checking entries as they happen rather than after year end.
Who Can Do It
Banks engage CA firms for concurrent audit. Some banks use their own internal audit teams which may include CMAs in management roles — but the certification and signing authority remains with CAs.
Current Status After Income Tax Bill
Unchanged. The income tax amendment does not affect concurrent audit eligibility.
Type 3 — Special Purpose Audits and Certifications for Bank Loans
What It Is
This is the category most relevant to MSME borrowers. Banks require audited financial statements, certified CMA Reports, and verified project reports as part of loan appraisal.
Who Can Do It
This is the area of genuine nuance. The CMA Report Credit Monitoring Arrangement report can be prepared by qualified professionals including CMAs and CAs. The CMA Data preparation for loan applications has never been exclusively restricted to CAs.
However banks consistently prefer and often specifically require CA-certified documentation for loan applications because CA certification carries statutory accountability under the Chartered Accountants Act 1949 that CMA certification does not carry for bank-related documentation.
What CMAs Can Do — A Fair and Accurate Assessment
Areas Where CMAs Are Genuinely Competent and Authorised
CMAs bring specific expertise in cost accounting, management accounting, and financial analysis that is highly relevant to business operations.
1. Cost Audit under Companies Act
CMAs conduct cost audits under Section 148 of the Companies Act 2013 for certain classes of companies. This is a statutory function for which CMA authority is created and exclusive CAs cannot do cost audit. This is the reverse of bank audit CAs do bank audits only, CMAs do cost audits only.
2. Tax Audit Under Income Tax Act – Post Amendment
Following the Income Tax Amendment Bill passage CMAs can conduct tax audits under Section 44AB of the Income Tax Act for eligible assesses. This is a genuine expansion of CMA authority in the income tax domain.
3. CMA Report Preparation for Bank Loans
CMAs can prepare CMA Data Credit Monitoring Arrangement reports for bank loan applications. The format is technically demanding and CMAs with financial analysis training are competent to prepare it.
But this is the real world we see every week – bank credit officers have much higher confidence when they get CA-certified CMA Reports versus CMA-certified ones. It is not always a legal requirement. It is a reality of practical credence in the Indian banking system.
4. Financial Analysis & Management Consulting
CMAs have expertise in cost-structure analysis, management reporting, pricing strategy and operational financial planning. These are genuine professional strengths that should be used effectively by companies.
Areas Exclusively Reserved for CAs in Banking Context
Statutory audit of banks and signing of their annual financial statements. Certificate of parallel audit. Audits of Scheduled Commercial Banks Branches. Statutory audit of NBFCs exceeding threshold. Signing of audit reports under the Companies Act for listed and large private companies.
Statutory bank audit and signing of annual financial statements of banks. Concurrent audit certification. Branch audit of scheduled commercial banks. Statutory audit of NBFCs above threshold. Signing of audit reports under the Companies Act for listed companies and large private companies.
The Practical Reality — What Banks Actually Accept
Get Feasibility Report Associates Every Week
Our CA team interacts with bank credit officers across SBI, PNB, Bank of Baroda, and all major banks processing MSME loan applications across India.
The consistent pattern we observe is that banks process CA-certified project reports and CMA reports without credential queries. Banks sometimes generate specific queries when documentation is certified by non-CA professionals asking for additional verification or CA countersignature.
This is not a legal requirement in every case. It is a practical credibility signal. CA certification under the Chartered Accountants Act 1949 creates a specific professional accountability framework—ICAI-CA disciplinary action, professional indemnity, and regulatory oversight that bank credit teams are trained to recognize and trust.
The PMEGP and Government Scheme-Specific Requirements
For PMEGP, CMEGP, CGTMSE, NABARD, and Stand Up India applications, the portal documentation requirements in most states specifically mention CA-certified documentation. Some portals use the word “chartered accountant” explicitly. Others use “practicing professional,” which can be interpreted more broadly, but in practice, implementing agencies process CA-certified documents faster.
The Income Tax Bill — What Actually Changed for MSME Businesses
The Practical Impact on Loan Documentation
The Income Tax Amendment Bill change expanded CMA authority in income tax and does not affect bank loan documentation requirements. Your bank does not care about income tax audit eligibility. Your bank cares about whether your financial documentation carries professional accountability that it recognizes.
The Tax Audit Practical Impact
For businesses that need tax audits under Section 44AB the expanded CMA authority means you have a choice of professional for income tax compliance specifically. For loan documentation the practical preference for CA certification remains unchanged.
Our Professional Perspective
As a CA firm we have an obvious interest in CA-certified documentation. We acknowledge that. So let us be explicit if a CMA with strong financial analysis skills prepares your loan documentation and your bank accepts it without queries that is a valid outcome.
The risk is that many MSME borrowers who save a few hundred rupees on CMA preparation then wait three to four weeks for their application to generate queries and then need CA certification anyway. The efficiency cost of starting with non-CA documentation that subsequently requires CA countersignature is real.
A Comparison That Clarifies Everything
| Function | CA Authority | CMA Authority | Post-Amendment Change |
| Statutory Bank Audit | Yes — exclusively | No | No change |
| Concurrent Bank Audit | Yes | No | No change |
| Tax Audit Section 44AB | Yes | Yes — newly expanded | CMA authority added |
| Cost Audit Section 148 | No | Yes — exclusively | No change |
| CMA Report for Bank Loan | Yes — preferred | Yes — permitted | No change |
| Statutory Audit Companies Act | Yes — for specified categories | No | No change |
| Income Tax Certifications | Yes | Yes — newly expanded | CMA authority added |
How Sharda Associates Approaches This
Sharda Associates prepares CA Certified CMA Reports, Project Reports, Detailed Project Reports and Feasibility Reports for MSME loan applications. Our CA’s ICAI membership number is there on every document.
We do these for clients in all states of India, fully online. Starting Rs.2,999. All revisions are absolutely free until your bank approves.
We are also working with qualified CMAs for cost audit and management accounting functions where their expertise is both legally appropriate and professionally strong for businesses that also require tax audit services in addition to income tax amendment.
The right professional for the right role. That is the only good framework for MSME businesses
It did not alter the powers of bank audits. It did not alter the practical credibility dynamic that bank credit officers use when they review loan documentation. It did not diminish the value of CA-certified bank loan documents or make CMA-certified documents equally acceptable.
This is the full story after the income tax bill: CMAs have got a real foothold in income tax practice. Bank audits and the de facto preference for CA-certified loan documentation persist. Use each professional at what they are statutorily authorized and practically strongest at.
CA certification is the best option for your MSME bank loan documentation. Not because CMAs are incompetent – they’re not. The credibility framework of the Indian banking system is built around CA accountability. The framework has not changed.
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