Implementation of Basel Accords I & II highlights maintenance of capital by banks aligned with risks undertaken. Risk Based Supervision (RBS) of banks flows from the “Core principles of Bank Supervision” enunciated by Basel Committee on Banking Supervision. Establishment of a robust Risk Based Internal Audit (RBIA) by banks is an important facilitator for the move towards RBS. The book traces the approach of banks towards the internal audit function and the need to replace the multiple forms of internal audits by RBIA.The progress in implementation of RBIA in India has been found to be uneven amongst different banks. To identify the major reasons/differentiating factors for this; the author conducted an extensive survey study of banks, inspectors/auditors and held discussions with senior executives of banks and RBI during 2009-10. An innovative Rating model for assessing the organizational preparedness of banks for implementation of RBIA has been developed by the author. Some important issues have been identified and suggestions made for banks and supervisor to initiate corrective action and make the implementation of RBIA more effective.