State Bank of India Act, 1955
(1) The affairs of the State Bank shall be 105[audited by two or more auditors] duly qualified to act as auditors of companies under 106[section 226 of the Companies Act, 1956], who shall be appointed by the Reserve Bank in consultation with the Central Government.
(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 office 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 reappointment.
(5) The auditors shall severally be, and continue to act as, auditors until the 107[annual] 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 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 108[a true and fair 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 o 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 shown a true balance of 109[profit or 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.
110 [Explanation 1.-For the purposes of this Act,-
(a) the balance-sheet shall not be treated as not disclosing a true and fair view of the affairs of the State Bank, and
(b) the profit and loss account shall not be treated as not showing a true balance of profit or loss for the period covered by such account, merely by reason of the fact that the balance-sheet or, as the case may be, the profit and loss account, does not disclose any matters which are, by the provisions of the Banking Regulation Act, 1949, read with the relevant provisions of this Act, not required to be disclosed.
Explanation 2- For the purposes of this Act, the accounts of the State Bank shall bot be deemed as having not been properly drawn up on the ground merely that they do not disclose certain matters if-
(i) those matters are such as the State Bank is, by virtue of any provision contained in the Banking Regulation Act, 1949, read with the relevant provisions of this Act, or any other Act, not required to disclose; and
(ii) the provisions referred to in clause (i) are specified in the balance-sheet and profit and loss account of the State Bank or in the Auditors report.]
(8) The auditor 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 any time such auditors as it thinks fit to examine and report on the accounts of the State Bank.