The intent of this paper is to cover the various facets of forensic audits for banks as a tool to manage their NPAs, both for preventive and investigative purposes.
The problem of NPAs has remained acute in the case of large corporate loans. The introduction of beneficial ownership provisions in the Companies Act, 2013, Insolvency and Bankruptcy Code 2016 (e.g., section 29A), Bank’s Know Your Client (KYC) and Anti-Money Laundering (AML) provisions, etc., also require application of forensic audit methods to identify the actual beneficiaries of funds disbursed in the banking sector. It is time to reflect how banks have effectively used forensic audit to reduce NPA losses, recover assets and improve governance
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