Quick answer: Concurrent audit is a continuous, near real-time review of a bank branch’s transactions and controls, carried out by internal staff or external CA firms appointed by the bank. It aims to detect irregularities and lapses soon after they occur, rather than months later during the annual audit.
The RBI encourages banks to cover a significant share of their business through concurrent audit — especially large branches, treasury operations and high-risk areas. Many banks engage external Chartered Accountant firms for this work.
Areas typically covered
- Advances — sanction, disbursement, documentation and monitoring
- Deposits — account opening, KYC and AML compliance
- Cash and remittances
- Foreign exchange and treasury transactions
- Revenue — interest, fees and charges
- Compliance with RBI and internal guidelines
How reporting works
The concurrent auditor submits periodic (usually monthly) reports to the bank’s controlling office, highlighting irregularities, their rectification status and serious matters that require immediate attention. Critical findings are often reported immediately rather than waiting for the monthly report.
Concurrent vs statutory audit
| Aspect | Concurrent audit | Statutory audit |
|---|---|---|
| Timing | Ongoing, during the year | Annual, after year-end |
| Appointed by | Bank management | As per RBI framework |
| Focus | Transactions and controls | True and fair view of accounts |
Frequently asked questions
Is concurrent audit mandatory?
Banks are required by RBI guidelines to have a concurrent audit system covering specified branches and business areas.
Can a CA firm be both concurrent and statutory auditor of the same branch?
Generally no — independence norms restrict the same firm from holding both roles for the same branch simultaneously.
How long is a concurrent audit appointment?
Appointments are usually for a year and may be renewed as per the bank’s policy.
Related: Audit & Assurance · Bank statutory audit guide