Can CMA do bank audits in India? Income tax bill.
Can CMA do bank audits in India?
By Sharda Associates | CA Firm, Bhopal, India
Before the Income Tax Amendment Bill, the answer was simple. "After it there is a real confusion in the market. There are a lot of claims floating around on social media. Some say that CMAs can now do everything a CA does. Some say nothing has changed. Much of that shared is false, incomplete, or intentionally misleading.
This guide gives you the complete, accurate truth — what changed, what did not change, what CMAs can do, what only CAs can do, and why this distinction matters specifically for your loan documentation and bank audit requirements.
At Sharda Associates, a CA firm in Bhopal, Madhya Pradesh, our CA team has assisted more than 45,500 businesses in India with their financial documentation needs. We deal with bank audit requirements, statutory certification, and loan documentation weekly. We know what banks will and will not accept.
Get Your CA-Certified Loan Documentation →
What Can a CMA Do for Bank Audits in India — The Direct Answer
In India, a CMA cost and management accountant registered with ICAI-CMA cannot conduct statutory bank audits. Statutory bank audits, concurrent audits and branch audits of scheduled commercial banks are the exclusive domain of chartered accountants registered with ICAI-CA. The Income Tax Amendment Bill expanded the scope of CMA in certain areas of income tax. It did not extend the authority of CMA to the audit of banks under the Banking Regulation Act or RBI guidelines.
What the Income Tax Amendment Bill 2026 Actually Said
The Particular Change That Caused the Confusion
The Income Tax Amendment Bill proposed to expand the definition of “accountant” under the Income Tax Act to include CMAs (Cost and Management Accountants) for certain income tax certifications and reporting.
Prior to this amendment, the term “accountant” under the Income Tax Act was restricted to a CA registered with ICAI-CA. The proposed expansion would have enabled CMAs to signcertain certain income tax certificates, conduct tax audits under Section 44AB and provideations under various income tax provisions.
What was proposed vs. what passed
This is where a lot of the confusion comes from. As introduced, the bill proposed broad expansion. After much debate—including opposition from ICAI-CA—the scope of what passed into law was narrower than initially proposed.
The crux is the Income Tax Amendment Bill did not include the requirements pertaining to banks—bank audits, concurrent audits, and statutory certifications under the Banking Regulation Act. They are covered by different legislation altogether.
Why This Confusion Happened
The announcement of the change in the income tax bill led to a flurry of social media content, much of it inaccurate, claiming CMAs could now do “everything a CA does." This is false, when it was written and still is.
One such law is the Income Tax Act. Bank audit authority is vested with the Banking Regulation Act 1949, RBI guidelines, and the Companies Act 2013. Changes in accounting rules for income tax have nothing to do with eligibility for a bank audit, which is governed by entirely different legislation.
The Three Types of Bank Audits: Who Can Do Each
There are three main categories of bank audits in India statutory audit, concurrent audit, and special audits. All three require a CA registered with ICAI-CA. CMAs are not eligible for any of these three categories under current RBI guidelines and the Banking Regulation Act 1949.
Type 1 — Statutory Bank Audit
What It Is
The annual audit of a bank's financial statements required under the Banking Regulation Act 1949. This is the primary audit that certifies whether a bank's financial statements give a true and fair view.
Who Can Do It
Only firms of chartered accountants empanelled with RBI. The empanelment is specifically for CA firms — not CMA firms. RBI's empanelment criteria include minimum number of CA partners, audit experience in banking sector, and ICAI-CA registration.
Current Status After Income Tax Bill
Unchanged. CMAs cannot conduct statutory bank audits. No legislative change has altered this position.
Type 2 — Concurrent Audit
What It Is
An ongoing real-time internal audit of bank branch transactions conducted alongside operations — checking entries as they happen rather than after year end.
Who Can Do It
Banks engage CA firms for concurrent audit. Some banks use their own internal audit teams which may include CMAs in management roles — but the certification and signing authority remains with CAs.
Current Status After Income Tax Bill
Unchanged. The income tax amendment does not affect concurrent audit eligibility.
Type 3 — Special Purpose Audits and Certifications for Bank Loans
What It Is
This is the category most relevant to MSME borrowers. Banks require audited financial statements, certified CMA Reports, and verified project reports as part of loan appraisal.
Who Can Do It
This is the area of genuine nuance. The CMA Report Credit Monitoring Arrangement report can be prepared by qualified professionals including CMAs and CAs. The CMA Data preparation for loan applications has never been exclusively restricted to CAs.
However banks consistently prefer and often specifically require CA-certified documentation for loan applications because CA certification carries statutory accountability under the Chartered Accountants Act 1949 that CMA certification does not carry for bank-related documentation.
Get Your CA-Certified CMA Report →
What CMAs Can Do — A Fair and Accurate Assessment
Areas Where CMAs Are Genuinely Competent and Authorised
CMAs bring specific expertise in cost accounting, management accounting, and financial analysis that is highly relevant to business operations.
1. Cost Audit Under the Companies Act
CMAs conduct cost audits under Section 148 of the Companies Act 2013 for specified categories of companies. This is a statutory function where CMA authority is established and exclusive CAs cannot conduct cost audits. This is the mirror image of bank audit CAs do bank audits exclusively, CMAs do cost audits exclusively.
2. Tax Audit Under the Income Tax Act — Post Amendment
Following the Income Tax Amendment Bill passage CMAs can conduct tax audits under Section 44AB of the Income Tax Act for eligible assesses. This is a genuine expansion of CMA authority in the income tax domain.
3. CMA Report Preparation for Bank Loans
CMAs can prepare CMA Data Credit Monitoring Arrangement reports for bank loan applications. The format is technically demanding and CMAs with financial analysis training are competent to prepare it.
However and this is the practical reality our team sees every week bank credit officers respond with significantly higher confidence to CA-certified CMA Reports than to CMA-certified ones. This is not a legal requirement in all cases. It is a practical credibility reality in the Indian banking system.
4. Financial Analysis and Management Consulting
CMAs are strong in cost structure analysis, management reporting, pricing strategy, and operational financial planning. These are genuine professional strengths that businesses should use appropriately.
Areas Exclusively Reserved for CAs in Banking Context
Statutory bank audit and signing of annual financial statements of banks. Concurrent audit certification. Branch audit of scheduled commercial banks. Statutory audit of NBFCs above threshold. Signing of audit reports under the Companies Act for listed companies and large private companies.
The Practical Reality — What Banks Actually Accept
What We See at Sharda Associates Every Week
Our CA team interacts with bank credit officers across SBI, PNB, Bank of Baroda, and all major banks processing MSME loan applications across India.
The consistent pattern we observe banks process CA-certified Project Reports and CMA Reports without credential queries. Banks sometimes generate specific queries when documentation is certified by non-CA professionals asking for additional verification or CA countersignature.
This is not a legal requirement in every case. It is a practical credibility signal. CA certification under the Chartered Accountants Act 1949 creates a specific professional accountability framework — ICAI-CA disciplinary action, professional indemnity, and regulatory oversight that bank credit teams are trained to recognize and trust.
The PMEGP and Government Scheme Specific Requirement
For PMEGP, CMEGP, CGTMSE, NABARD, and Stand Up India applications the portal documentation requirements in most states specifically mention CA-certified documentation. Some portals use the word "chartered accountant" explicitly. Others use "practicing professional" which can be interpreted more broadly but in practice, implementing agencies process CA-certified documents faster.
The Income Tax Bill — What Actually Changed for MSME Businesses
The Practical Impact on Loan Documentation
The Income Tax Amendment Bill change expanded CMA authority in income tax does not affect bank loan documentation requirements. Your bank does not care about income tax audit eligibility. Your bank cares about whether your financial documentation carries professional accountability that it recognises.
The Tax Audit Practical Impact
For businesses that need tax audits under Section 44AB the expanded CMA authority means you have a choice of professional for income tax compliance specifically. For loan documentation the practical preference for CA certification remains unchanged.
Our Professional Perspective
As a CA firm we have an obvious interest in CA-certified documentation. We acknowledge that. So let us be explicit if a CMA with strong financial analysis skills prepares your loan documentation and your bank accepts it without queries that is a valid outcome.
The risk is that many MSME borrowers who save a few hundred rupees on CMA preparation then wait three to four weeks for their application to generate queries and then need CA certification anyway. The efficiency cost of starting with non-CA documentation that subsequently requires CA countersignature is real.
A Comparison That Clarifies Everything
How Sharda Associates Approaches This
Sharda Associates prepares CA Certified CMA Reports, Project Reports, Detailed Project Reports and Feasibility Reports for MSME loan applications. Our CA’s ICAI membership number is there on every document.
We do these for clients in all states of India, fully online. Starting Rs.2,999. All revisions are absolutely free until your bank approves.
We are also working with qualified CMAs for cost audit and management accounting functions where their expertise is both legally appropriate and professionally strong for businesses that also require tax audit services in addition to income tax amendment.
The right professional for the right role. That is the only good framework for MSME businesses.
Get Your CA-Certified Loan Documentation →
Conclusion
The Income Tax Amendment Bill 2025 further expanded the mandate of the CMA in the income tax arena. This is meaningful and real professional development for the CMA profession.
It did not change the powers of bank audits. It did not alter the practical credibility dynamic that bank credit officers use when reviewing loan documentation. It didn’t make CA-certified bank loan documents less valuable or CMA-certified documents equally accepted.
This is the full story after the income tax bill: CMAs got real ground in income tax practice. Bank audits and the practical preference for CA-certified loan documentation remain unchanged. Use each professional for what they are statutorily authorized and practically strongest at.
For your MSME bank loan documentation, CA certification is the right choice. Not because CMAs are incompetent — they are not. Because the Indian banking system's credibility framework is built around CA accountability, and that framework has not changed.
Call or WhatsApp +91 89899 77769
.jpg)
Comments
Post a Comment