Case Law Details

Case Name : Shri Mandeep Singh Vs Central Public Information Officer,Bank of India (Central Information Commission)
Appeal Number : File No. CIC/SH/A/2014/001168
Date of Judgement/Order : 19/06/2015
Related Assessment Year :

Whether presumptions/projections can be certified and what will be parameter for its accuracy ? 

Appellant Mandeep Singh filed RTI’s to the head offices of the Banks for seeking information, whether head office issued any directions that Project Reports, Projected Balance Sheets and CMA data should be certified by Chartered Accountants. RBI and mostly Banks like SBI,SBOP,UNION BANK OF INDIA, PNB, BANK OF BARODA, PUNJAB AND SIND BANK etc replied that no such kind directions issued by head office, irrespective that mostly bank branches in India compels to the borrower to get certified Project Reports and Projected Balance sheets from Chartered Accountants.

Bank of India denied information, appeal against the order filed before Hon’ble Central Information Commission. CIC directs the Bank of India to provide information as per following order.   

Central Information Commission,

New Delhi

File No. CIC/SH/A/2014/001168

Right to Information Act­,2005

­Under Section (19) 

Date of hearing : 19th June 2015
Date of decision : 19th June 2015
Name of the Appellant : Shri Mandeep Singh
Name of the Public Authority/Respondent  : Central Public Information Officer,Bank of India,

Head Office, Legal Dept. Star House, Third Floor, C­5, G Block, Bandra Kurla Complex, Bandra (East), P B No. 8135, Mumbai ­ 400 051

The Appellant was present at the NIC Studio, Sangrur.

On behalf of the Respondents, Shri Ramadas K, Senior Manager (Law) was present at the NIC Studio, Mumbai.

Information Commissioner  :  Shri Sharat Sabharwal

This  matter,  pertaining  to  an  RTI  application  dated  26.11.2013  filed  by  the Appellant, seeking information regarding certain bank guidelines in respect of loans, came up today. The Appellant stated that the bank has been asking the applicants for loans for various projects to submit their project reports and project balance sheets certified by a Chartered Accountant. He wanted to know the specific regulations of the bank as per which the above demand is being made by the bank officials. The representative of the Respondents stated that he was not certain whether there were any specific regulations in this regard. However, he would check the position and respond to the Appellant. We direct the CPIO to forward to the Appellant a certified copy of the bank regulations / guidelines, which require loan applicants to submit their project reports and project balance sheets certified by a Chartered Accountant. In case there are no such specific regulations / guidelines, the CPIO should inform the Appellant accordingly in writing. The CPIO should comply with our above directives within fifteen days of the receipt of this order, under intimation to the Commission. Such information, as  is provided, should be provided free of cost.

2. With the above directions, the appeal is disposed

3. Copies of this order be given free of cost to the parties

(Sharat Sabharwal)

Information Commissioner

Download Judgment/Order

More Under CA, CS, CMA

Posted Under

Category : CA, CS, CMA (3523)
Type : Judiciary (10108)
Tags : CIC Judgments (28) RTI (142) rti act (144)

2 responses to “RTI- Banks to inform their guideline/regulations which requires CAs to certify project reports/ balance sheets ”

  1. Sridhar N says:

    What is the status of RTI now…?

  2. Sridhar N says:

    It is very sad that neither Bank management nor the ICAI is coming out with a clear stand on this with relevant guidelines. During recent bank audit, we found CA s signing on anything or everything, be it a provisional or projected financials or a net worth certificate.. the local chieftains (branch managers/loan officers) in order to protect their back, insist on CA signature and some of members of our fraternity lack conviction in negating such directions for the fear of losing clients. I appreciate Mr Mandeep Singh”s initiative in moving a RTI and i am sure given the lack of clarity, no body would come forward to make their stand clear. Atleast, in the interest of Public at large, ICAI should come with a public advertisement clarifying the position of CAs as it would help young CA practitioners not to do indulge in something which they are prohibited from… Sridhar CA

  3. BSKRAO says:

    (1) Practice of Income-Tax law involves preparation & filing of Income-Tax Returns and Acting & Pleading before Revenue Authorities on behalf of assesses. Chartered Accountants are not issued license to practice any Indian laws or Income-Tax law in particular either in the statute book of Indian Income-Tax Act or in Chartered Accountants Act & hence they are not accountable to Income-Tax Deptt. or Outside Agencies. Some of the bank branches (ICICI Bank in Particular) are insisting their clients to get signature of Chartered Accountants on their Income-Tax records & documents. This amounts to clear violation of Notaries Act & contravention of Apex Court verdict, liable for action under Article 129 read with Article 142(2) of Indian Constitution.

    (2) Can any one provide me copies of such instructions/Circular/Notification issued by Reserve Bank of India, All Public Sector Banks, All Regional Rural Banks & All Private Sector Banks in the matter of “Attestation” of Income-Tax Records & Documents of their clients by Chartered Accountants – If available kindly mail the same to raoshimoga@gmail.com

  4. SATYA says:

    Sir,
    The information required by Mandip singh is quite interesting and as far as my constrained knowledge is concerned, no such certification is necessary but furnishg the details of the C.A who prepared the project reports may be sought to enable them to contact such C.A. for getting their doubts if any clarified with regard to woking of the statments etc.,
    In this connection, I would like to know whether there are any RBI guidelines which require banks to get the net worth statements of the borrowers to be certified by C.A. because now a days most of the nationalised banks are insisting for the same and a C.A. is not permitted to certify the same unless and otherwise the values are extracted from books and not market values as in most of the cases net worth statements consist market values only. And banks must be strictly instructed not to obtain C.A. certification if the statement contain market values.

  5. MANDEEP SINGH says:

    we need to ask from bank, when accounts are not audited by CA under any law than how can they demand sundry debotor should be certified by chartered accountant. Whether CA personally knows to the debtors & what will be responsibility of certifying authority, if it is found in future that sundry debtors are not correct. Ask from manager about it?

  6. K C SInghvi says:

    Can Bank ask for CA certified Book debts quarterly ?

  7. MANDEEP SINGH says:

    If banks wants that project reports & Projected Balance sheets should be certified by Chartered Accountants than banks need to determine margin of error may be 5 % to 10%. If in future expected sales not attained by business or difference exists more from margin error than Certifying Authority should be responsible for it.

  8. MANDEEP SINGH says:

    Muralidhar Prasad sir,
    Managers are not taking the matter seriously and blindly faith on certified balance sheets without confirm sales & purchases from locl VAT & INCOME TAX DEPARTMENTS. It is duty of managers to cross check sale purchase with local departments.

  9. Muralidhar Prasad says:

    Every bank will get two types of applicants to avail loans in to their fold

    1. Applicants with existing business – requesting for working capital limits , long term loans for various purposes

    2. Applicants starting new business – requesting for working capital limits , long term loans for various purposes

    in case of 1st one , CA certificates are required as per tax audit guidelines for the existing business details

    In case of projections and/or CMA data , whether it is an existing business or a new one, CA certificate is not required for projections since projections depends on various underlying assumptions made while studying the viability of the project. CA certificate may not really add any value to the projections

    However , in the post autonomous scenario of banks , the credit policy / loan policy guidelines are prepared by the respective banks and approved by the banks boards concerned.

    In some banks policy guidelines it was made mandatory that if the total banks credit exposure exceeds certain limits the project report (where projections are also available) should be prepared by consultants / professional organizations

    Regards
    Muralidhar Prasad
    Associate Professor and
    I/c Director – Center for International Studies
    (Formerly Senior Manager – Andhra Bank)
    Siva Sivani Institute of Management, Kompally, Secunderabad – 500 014
    Cell : 9866 230 461

  10. taxwell says:

    WHAT RESPONSE WAS FINALLY GIVEN TO RTI ACTIVIST

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