Reserve Bank of India (Commercial Banks - Internal Audit Function) Directions, 2026

Source: Reserve Bank of India

Category: Digital Lending

Published: Fri, 31 Jul 2026 16:00:00

RBI/DoS/2026-27/413 DoS.CO.PPG.7/11.01.005/2026-27 July 31, 2026 Reserve Bank of India (Commercial Banks - Internal Audit Function) Directions, 2026 Table of Contents Introduction Chapter I - Preliminary A. Short Title and Commencement B. Applicability Chapter II - Governance and Oversight A. Role of the Board B. Role of the Senior Management Chapter III - Risk-Based Internal Audit Framework A. Policy on Internal Audit B. Functional Independence C. Risk Assessment D. Scope E. Communication F. Performance Evaluation G. Outsourcing Chapter IV - Head of Internal Audit A. Authority, Stature, and Independence B. Tenure C. Reporting Line Chapter V - Repeal and Other Provisions A. Repeal and Saving B. Application of Other Laws Not barred C. Interpretations Introduction A sound Internal Audit function is an integral component of a bank’s internal control and risk management framework. In view of the limitations of a transaction-centric audit approach, the banks are required to adopt Risk Based Internal Audit (RBIA), which places emphasis on the assessment of risk management systems and internal controls, in addition to selective transaction testing, in alignment with evolving governa