(1) The affairs of the State Bank shall be 1[audited by two or more auditors] duly qualified to act as auditors of companies under 2[section 226 of the Companies Act, 1956 (1 of 1956)], who shall be appointed by 3[the State Bank with the previous approval 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 not 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 reappointment.

(5) The auditors shall severally be, and continue to act as, auditors until the 4[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 3[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—

(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—

7[Explanation 1.— For the purposes of this Act,—

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 (10 of 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 not be deemed as having not been properly drawn up on the ground merely that they do not disclose certain matters if

(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 any time such auditors as it thinks fit to examine and report on the accounts of the State Bank.

1. Subs. by Act 48 of 1973, s. 16, for "audited by two auditors (w.e.f. 31-12-1973). 2. Subs. by Act 26 of 1959, s. 8, for "sub-section (1) of section 144 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 28-8-1959). 3. Subs. by Act 27 of 2010, s. 28, for "the Reserve Bank in consultation with the Central Government " (w.e.f. 15-9-2010). 4. Subs. by Act 26 of 1959, s. 8, for "first " (w.e.f. 28-8-1959). 5. Subs. by Act 35 of 1964, s. 13, for "a true and correct view " (w.e.f. 1-12-1964). 6. Subs. by Act 26 of 1959, s. 8, for "profit and loss " (w.e.f. 28-8-1959). 7. Ins. by Act 48 of 1973, s. 16 (w.e.f. 31-12-1973).