The State Bank of India Act,1955
Section 41. Audit
(1) The affairs of the State Bank shall be audited by two auditors duly qualified to act as auditors of companies under sub-section (1) of section 144 of the Indian Companies Act,1913 (7 of 1913), who shall be appointed by the 1[the State Bank with the previous appoval of the Reserve Bank].
(2) The auditors shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government.
(3) An auditor may be a shareholder but no director or member of a Local Board or of a Local Committee or an officer of the State Bank shall be eligible to be an auditor during his continuance in office as such director, member or officer.
(4) An auditor shall on relinquishing office be eligible for re-appointment.
(5) The auditors shall severally be, and continue to act as, auditors until the first general meeting after their respective appointment, and if any vacancy arises before the expiry of the term of office of an auditor, the vacancy may be filled by 1[the State Bank with the previous approval of the Reserve Bank].
(6) Every auditor shall be supplied with a copy of the annual balance sheet and profit and loss account, and a list of all books kept by the State bank, and it shall be the duty of the auditor to examine the balance sheet and profit and loss account with the accounts and vouchers relating thereto, and in the performance of his duties, the auditor-
(a) Shall have, at all reasonable times, access to the books, accounts and other documents of the State Bank;
(b) May, at the expense of the State Bank, or if he is appointed by the Central Government, at the expense of the Central government, employ accountants or other persons to assist him in investigating such accounts; and
(c) May, in relation to such accounts, examine any director or any member of a Local Board or of a Local Committee or any officer of the State Bank.
(7) The auditors shall make a report to the Central Government upon the annual balance sheet and accounts, and in every such report they shall state-
(a) Whether, in their opinion, the balance sheet is a full and fair balance sheet containing all the necessary particulars and properly drawn up so as to exhibit a true and correct view of the affairs of the State Bank, and in case they have called for any explanation or information, whether it has been given and whether it is satisfactory;
(b) Whether or not the transactions of the State Bank which have come to their notice have been within the powers of the State Bank;
(c) Whether or not the returns received from the offices and branches of the State bank have been found adequate for the purpose of their audit;
(d) Whether the profit and loss account shows a true balance of profit and loss for the period covered by such account; and
(e) Any other matter which they consider should be brought to the notice of the shareholders or the Central Government, as the case may be.
(8) The auditors shall also forward a copy of the audit report to the State Bank.
(9) Without prejudice to anything contained in the foregoing provisions, the Central Government may appoint at anytime such auditors as it thinks fit to examine and report on the accounts of the State Bank.
1. Subs. by Act 27 of 2010 w.e.f. 24-8-2010.