## Auditor Appointment in Banks

### Eligibility, Qualification & Disqualification

Governed by Section 141 of the Companies Act, 2013 — same criteria apply as for company auditors.

### Appointment

Type of Bank	Appointing Authority
Banking Company	Appointed at the AGM of shareholders
Nationalised Bank	Appointed by the Board of Directors (BoD) of the bank

> Note: For public sector banks, RBI approval/panel listing is also required in practice.

### Remuneration

Fixed in accordance with Section 142 of the Companies Act, 2013.

### Powers

Same as company auditors — right of access to:

Books of account
Accounts
Documents
Vouchers

Worked example

### Example 1

Scenario: An auditor holds shares in a nationalised bank worth ₹1,000. Is the auditor disqualified? Apply S.141 — a person who holds securities of the company (exceeding prescribed limits) is disqualified. Check prescribed threshold under Companies (Audit and Auditors) Rules, 2014.

### Example 2

Scenario: The Board of Directors of State Bank of India appoints its statutory auditors. Is this correct? Yes — SBI is a nationalised bank; appointment is by BoD, not at AGM.

⚠️ Common exam mistakes

Stating that all banks appoint auditors at AGM — only Banking Companies do; nationalised banks appoint via BoD.
Forgetting that disqualification criteria under S.141 (Companies Act) apply even to nationalised bank auditors.
Confusing remuneration fixation (S.142) with appointment (S.139/141).

Reference: Sections 141, 142 — Companies Act, 2013

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Appointment, Powers and Remuneration of Bank Auditors

Worked example

⚠️ Common exam mistakes