Professional Documents
Culture Documents
1 Guidelines For Concurrent Auditors
1 Guidelines For Concurrent Auditors
THROUGHLY.
Index
PAGE No
13-32
33- 59
60-61
62-63
64-65
66-67
68
CHAPTER 1
Objectives and Scope of CONCURRENT AUDIT
BACKGROUND
RBI directed all the banks to introduce system of concurrent audit for the first time in 1993 based
on the recommendations of Ghosh committee on frauds and malpractices in Banks.
Subsequently, a working group headed by Mr. Jilani, CMD of Punjab National Bank,
recommended some improvements in the system of concurrent audit in the Banks. Thereafter,
RBI issued fresh guidelines vide its circular dated 14th August 1996 to make the system of
concurrent audit in the Banks more effective .RBI issued another circular on 12th August 1997 in
connection with enlargement of scope of concurrent audit to cover FOREX transactions.
OBJECTIVES OF CONCURRENT AUDIT
1.With a view to bringing about an ongoing improvement in the standard of internal House
Keeping and identifying areas of weakness and deficiency and with a view to energizing the
process of rectification, this system of audit has been introduced at selected branches. The object
is to carry out certain audit tasks on an on going basis. The Concurrent Auditor has been
provided as a special resource to the Branch Manager/Officers Incharge of different department.
2. To shorten the interval between transaction and its examination by an independent person not
involved in its documentation. Improve functioning of the branch leading to improvement in its
performance and prevention of frauds. Concurrent audit is essentially a management process
integral to the establishment of sound internal accounting functions and effective controls and
setting the tone for a vigilant internal audit.
Concurrent audit is an examination, which is contemporary to the occurrence of transaction or is
carried out as near to it as possible. Thus concurrent audit is a regular process that has to be
carried out round the year at a branch on an on going basis. Concurrent audit is an independent
appraisal activity conceived as a systematic examination of all financial transactions at a branch
to ensure accuracy and compliance of internal systems and procedures as laid down by the bank.
It aims at minimizing the incidence of serious errors and fraudulent manipulations.
3. To supplement the efforts of the bank in carrying out simultaneous internal checks of the
transactions and compliance with the laid down system and procedure of the bank. Perform
substantive checking in key areas and on the spot rectification of deficiencies to preclude the
incidence of serious errors and fraudulent manipulations.
SCOPE OF CONCURRENT AUDIT
Concurrent auditor is required to check that:
Transactions are properly recorded documented and vouched.
Spot rectification of the irregularities and implementation of system and procedure of the bank.
To perform this job effectively and efficiently he must be aware of the latest guidelines issued by
the bank as well as RBI. He should also be well versed with the functioning of different deptts at
the branch.
2
A concurrent auditor should not sit on judgment /decision taken by the Branch Manager or an
authorized official of the branch. As concurrent auditors are not meant to interfere or block the
day-to-day working of the branch. The purpose of their presence is to provide a second look on
the operations. The concurrent auditors will have to essentially see whether the transactions or
decisions are within the policy parameters of the bank and RBI. And that they are within the
delegated authority and in compliance with the terms and conditions for exercise of such an
authority. He has also to see in case of sanctions received from higher authorities that terms and
conditions of such sanctions are duly complied with.
In very large branches having different sections dealing with specific activities concurrent
auditor is a means to the incharge of the branch to ensure that the different sections do function
within laid down parameters and procedures on an ongoing basis.
Whenever serious irregularities are observed these have to be immediately reported to H.O.
Inspection Deptt. as well as concerned Zonal Office. Irregularities having vigilance angle have
to be reported to H.O. Vigilance Department.
In case of observation of i) Acts of corruption and bribery on the part of branch officials ii)
frauds /misappropriation iii) abuse of power to get pecuniary benefits at the expense of the bank
iv) any other malpractices, the concurrent auditor shall not include these incident in his regular
report but, after discussion with the Branch Manager, shall report such facts by way of a special
confidential report to H.O. Inspection Deptt./ HO Vigilance Deptt.
PROCEDURAL ASPECTS OF CONCURRENT AUDIT
Our bank, based on the guidelines from RBI, has framed a policy for concurrent audit of the
selected branches of the bank. Administrative control over Concurrent auditors is to be exercised
by respective Zonal Inspectorates.
Areas required to be covered under concurrent audit
Concurrent Auditors are required to check the entire working of the branch covering 100%
transactions. An illustrative list of the areas covered under concurrent audit is as under;
a)
Cash
Daily cash transactions with particular reference to any abnormal receipts and payments.
Proper accounting of inward and outward cash remittances.
Proper accounting of Currency Chest transactions, its prompt reporting to the RBI.
Expenses incurrent by cash payment involving sizeable amount.
b)
Deposits
Advances:
Verify that loans and advances have been sanctioned as per standing guidelines of the bank. (i.e.
after due scrutiny and at the appropriate level),
Verify whether the sanctions are in accordance with delegated authority.
Verify that securities and documents have been received and properly charged/ registered.
3
Verify that post disbursement supervision and follow up is proper such as receipt of stock
statements, instalments, renewal of limits etc.
Verify whether there is any misutilisation of the loans and whether there are instances indicative
of diversion of funds.
Check whether the letters of credit issued by the branch are within the delegated power and
ensure that they are for genuine trade transactions.
Check the bank guarantees issued, whether they have been properly worded and recorded in the
register of the bank and that whether they have been promptly renewed on the due dates.
Verify proper follow up of overdue bills of exchange.
Verify whether the submission of claims to DICGC and ECGC is in time.
Verify that instances of exceeding discretionary powers have been promptly reported to
controlling/Head Office by the branch and have been got confirmed or ratified at the required
level.
Verify the frequency and genuiness of such exercise of authority beyond the discretionary
powers by the concerned officials.
Verify the CREDIT RATING done by the branch & ensure interest rates charged are as per the
Credit Rating allotted to the account.
d)
Housing Keeping:
Check that the maintenance and balancing of accounts ledgers and registers including clean cash
is proper.
Check reconciliation of entries outstanding in the inter branch suspense account (IBSA) and inter
bank accounts, Suspense account Sundry Creditors Account, DPWA account, Payment made on
account of other branches (POAB) account etc. Ensure early adjustment of large value entries.
Carry out a percentage check of calculations of interest, discount, commission and exchange.
Check whether debits in income account have been permitted by the competent authorities.
Check the transactions of staff accounts.
In case of difference in clearing there is a tendency to book it in an intermediary suspense
account (DNR A/C) instead of locating the difference. Examine the day book to verify as to how
the differences in clearing have been adjusted. Such instances should be reported to Head Office
in case the difference persists.
Detection and prevention of revenue leakages through close examination of income and
expenditure heads.
4
Check cheques returned/bills returned register and look into reasons for return of those
instruments.
Checking of inward and outward remittances (DDs,MTs and TTs).
(f)Know Your Customer (KYC) norms AND anti money laundering (ALM) norms.
(for guidelines please refer to various circulars issued from HO P&D & HO Inspection, latest
being Circular No.246 dated 26.07.2008)
b)
c)
REPORTING FORMATS
During the course of Audit of Branches the Concurrent Auditors are likely to make observations
of varied nature. Some of the observations may be of the nature of ordinary short-comings or
deficiencies in observance of systems and procedures. Some may be of the nature of general
comments for the guidance of branches. But there may be some findings observed by the
Concurrent Auditors during the course of inspection which may require a different kind of
reporting in view of their seriousness, and to enable the controlling offices to act upon such
findings at the earliest available opportunity to set right the deficiencies. Guidelines for
furnishing such reports are given here below:
6
1)
Daily Report:
ii)
Credit Management.
(These lists are illustrative and not exhaustive. Please seek chapter 4 for these guidance lists).
Serious irregularities enumerated in these guidance lists have to be covered in the Monthly
Reports / Quarterly Reports. With a view to bringing uniformity in the classification and
reporting of these serious irregularities, we have also given group Headings of Serious
irregularities (Please see Chapter 5). All serious irregularities (as per the Guidance Lists) should
be grouped as per Group Headings of Serious irregularities (GHSI). Monthly / Quarterly reports
should be grouped as per Group Headings of Serious Irregularities (GHSI). Monthly / Quarterly
reports should be notes of discussions and hence the subjects of these reports should be
thoroughly discussed with the Branch Manager and steps already taken, if any, should invariably
be incorporated in these reports.
Monthly reports of Concurrent Audit will consist of the following:
(i)Certificate of discussion with the BM
ii)Confirmation of receipt of the concurrent audit report by the BM
(iii) Flash Report/ Special Report
(iv) Executive Summary (including Development Report)
(v) Monthly Reporting formats Ann M I to Ann M XIV, which includes
(a)Report on Compliance of KYC /AML guidelines - Ann.M VII
(b)Income Tax / Service Tax deducted at source- Auditor Certificate- Ann. M VIII
Legal Compliance Certificate M IX
Compliance Certificate - Ann.M X
d) Report on Foreign Exchange business ( applicable only for branches authorized
to transact foreign exchange business) - Ann. M XI (A) To MXI (D)
(e) Environmental review of ALPM Branches/ EDP Audit of TBA branches) - M XII
(f) Report on Leakage of Revenue Ann M XIII (A) to MXIII (E)
(g) FRC of last Monthly Concurrent Audit Report M XIV
Monthly reports should not be sketchy, but should be factual, clear, exhaustive in details and
wherever necessary, should indicate the action initiated by the branch. It should also contain
specific views/opinion of the Auditor based on his findings. Apart from incorporating the
irregularities pertaining to a particular advance reviewed, these reports should invariably cover
therein other limits enjoyed by the party, liabilities thereof and the irregular features there under,
if any.
7
Special/Confidential Report:
Matters of grave nature such as shortage in cash or huge shortage in securities pledged or
hypothecated to the Bank which is likely to cause loss to the bank, large scale deviation from
sanction terms, short collection of interest and other income for sizeable amount in respect of
which immediate action is called for on the part of the Branch/Zonal/Head Office and also
observations pertaining to submission of claims under DICGC/ECGC have to be informed
immediately by way of Special/Confidential Reports (for detailed guidelines please see pages 17
to 19) to H.O. Inspection Department with a copy to Zonal Manager.
Quarterly Reports:
Quarterly reports will cover:
respective Zonal Office. Before drawing up the report, the Concurrent Auditor should have a
thorough discussion with the Branch Manager to ascertain all relevant points/facts on the subject
to be covered in the confidential report. The Concurrent Auditor should invariably furnish
therein his views/opinion/conclusions based on his findings.
The following are to be reported by way of confidential report:
a)
b)
c)
ANNEXURE- X
FORMAT OF FORWARDING LETTER OF
CONCURRENT AUDIT REPORT FOR THE MONTH /QUARTER ENDED
From
To
The Deputy General Manager (I)
H.O. Inspection Department
New Delhi.
-----------------------------------------------------
Dear Sir,
Sub:
I/We submit herewith the quarterly concurrent audit report in original in respect of captioned
branch. After discussion of the findings with the branch Manager, duplicate copy of the report
has been handed over to him for taking expeditious steps to set right the irregularities mentioned
in the report.
We confirm having mailed the copy of the report to Z.O. & Zonal Inspectorate / HO Inspection
(in case of quarterly report)
We also confirm of having strictly adhered to the instructions given in the guidelines regarding
coverage, norms, coverage area and also as per the printed report formats and the Audit
Checklist provided to us for the purpose of Concurrent Audit.
Yours faithfully,
10
ANNEXURE Y
FORMAT OF COMPLETION REPORT
From
To
The Deputy General Manager (I)
H.O. Inspection Department
New Delhi.
----------------------------------------------------Dear Sir,
Sub: Quarterly Concurrent Audit Report of _____________ Branch for the Quarter ending
__________.
The subject audit was taken in hand on ____________ and completed on __________. We
confirm that the important major functions of the audit like scrutiny of loan papers, review of
accounts etc. are being seen by Sh. ______________ who is/are practicing chartered accountants
and have utilized the services of our Assistants who are not practicing Chartered Accountants
only for the purpose of our assistance to carryout minor functioning like totaling, verification of
balancing etc.
Name of the Auditors who
Period covering the report from
Are conducting audit work
1
2
3
4
5
Names of assistants with qualifications and status who accompanied auditors for auditing work
1.
2.
3.
4.
Yours faithfully,
Auditors
Date:
We certify that he above information furnished by the auditors is correct.
BRANCH MANAGER
11
ANNEXURE- Z
ATTENDANCE CERTIFICATE
( THIS CERTIFICATE IS TO ACCOMPANY THE PROFESSIONAL FEE BILL TO BE SENT
TO RESPECTIVE ZONAL INSPECTORATE)
1.
B.O. __________________________
2.
Month _________________
3.
4.
_____________
5.
______________
6.
_____________
____________________________
_______________________________________________________________
7.
8.
9.
BRANCH MANAGER
BO
DATE
CONCURRENT AUDITOR
NAME
DATE
12
CHAPPER II
General routine and House keeping
Audit Check List - A I
Cash
(1100)
110001.
110002
110003.
Have you verified cash scrolls for receipts, token books for payments ?
110004.
Have you verified that no paid cheques/debit vouchers held alongwith the cash
purporting to represent payments made but not yet brought into account.
110005.
Have you verified that cash and other valuables are being checked by Zonal
Office? (Dates of last two checkings be given as per annexure-I).
110006.
110007.
Whether entire cash is being checked by the Manager at regular intervals atleast
once in a month and whether a record of such verification is being maintained?
110008.
Whether soiled notes held are within reasonable limit and these are exchanged
at the RBI/Currency Chest at regular intervals ?
110009.
Are you satisfied that cash bundles are stitched with prescribed cash slips and
signed in full by the cashier/officer concerned ?
110010.
110011.
Whether cash brought over to the counter normally does not exceed the usual
requirements ?
110012.
110013.
Whether all the terms and conditions in regard to insurance of cash in safe
and in transit are being complied ?
13
110014.
Whether duplicate set of keys of strong room and cash safe etc. were
withdrawn during inspection.
110015.
Whether the same were brought in use and exchanged in your presence ?
110016.
110017.
110018.
Have you verified that the slips on bundles consisting of notes of denomination of
Rs.500/-, Rs.100/-, and Rs.50/- are duly signed by the cashier and countersigned by the
Manager/Branch Incharge ?
TOKENS
110019.
Whether the branch is following the systems of tokens and tokens not in use are
kept in the safe ?
110020.
Whether all the tokens in use are kept under lock and key of the authorized
officials at the close of business?
110021.
110022.
Whether proper entries are made for tokens received back at the close of business
from the cashiers, ledger keepers and departmental incharge against initials ?
110023.
110024.
110025.
14
CASH MANAGEMENT
110101.
(1101)
Have you satisfied that correct assessment of daily cash requirements is made
by the BM ?
110102.
Have you verified that minimum cash balance is maintained by the branch for
daily transactions?
110103.
Have you satisfied that proper utilization of cashier manpower including paying
cashiers is made for sorting and bundling of notes denomination-wise ?
110104.
Are you satisfied that the cashier staff has full days job and that hey attend and
leave the office according to scheduled working hours ?
110105.
Are you satisfied that the branch is depositing surplus cash (if not otherwise
disposed of) with the nearest branch/currency chest/RBI/SBI etc. (Inspectors should furnish
figures of average cash holding on fortnightly basis as against the Retention Limit fixed for the
branch since the date of last inspection as per Annexure VIII)?
110106.
Have you verified that entries relating to remittance in transit are reversed within
the prescribed period ? List of entries outstanding for more than 10 days should be furnished as
per Annexure 1 (e)
110107.
Whether adequate escort is provided for transit cash remittances in accordance
with HO Security Department Circular No.1/93 dated 16.03.1993?
110108.
110109.
110110.
Miscellaneous
15
(1102)
110201.
Whether balances in petty cash, postage and stamps in hand as on the date
of inspection tally with GL.?
110202.
Have you physically counted the adhesive stamps and stamp papers/forms
and tallied with balances in GL ?
110203.
Have you verified that the branch maintains adequate stock of stamp forms?
110204.
110205.
Have you physically verified all the unused/unissued cheque books/draft books,
MC books, FDR Books and other security forms with the record and found that no security form
is missing (in case of any shortage, inspecting officer must inform ZO/HO(I) with the following
details). Have you further verified that all security items are kept under the joint custody of BM
and second man and are also released jointly to prevent fraud?
16
BALANCING OF BOOKS
(1103)
110301
110302
Whether office orders are issued invariably on or before the last Friday of every
month for the tallying of balances and the same are got noted from the concerned
clerks/officers?
110303
Whether branch maintains a proper record of the periodical balancing of books
and the balance books are duly signed by the clerks, officers and Manager ?
110304
Whether all the balances are tallied upto date (if not attach a list of untallied
balances as per Annexure II) mentioning clearly GL/PL Balances and the difference as on the
latest date/month for which balances have been taken down and tallied ?
110305
110306
110307
Whether books are generally balanced by persons other than those handling them?
110308
Whether folio numbers and names of the account holders are being written in
balance books and totals/cuttings/alterations etc. are duly authenticated ?
110309
Whether subsidiary books are maintained and tallied with GL every month
(for Saving Bank & Current Accounts) ?
17
DEPOSIT ACCOUNTS
110401
(1104)
110402
Whether summations of debit and credit entries are made on the red lines as well
as at the end of each page of individual account sheets in the ledgers and the same are checked
and authenticated ?
110403
Whether cross checking of entries in ledgers with long books is done daily ?
110404
Whether ledger entries/balances are properly initialed, ledger heads duly signed in
token of having checked the correctness of names, addresses, brought forward balances, mode of
operation, cheque book numbers, stop payment instructions, date of birth of minors etc. ?
110405
110406
Whether ledger keepers are rotated periodically and the same employee is not
allowed to work on the same ledgers for an unduly long time (office orders issued for the
allocation of duties issued since the date of last inspection should be seen in this regard ?
110407
Whether counter foils of deposit receipts issued are checked by the Incharge of
the Branch in the evening with the relative books/vouchers/cash books etc. to ensure the
genuineness of the transaction?
110408
Whether diary of due dates of terms deposits maintained and deposits not paid or
renewed on due dates transferred to overdue deposit account?
110409
110410
Whether the facility of automatic renewal of FDRs is provided to the customers in
terms of P&D Cir.No.1511 dt. 17.9.92 and P&D Cir.No.1430 dt.10.8.91?
110411
Whether account opening forms are properly filled in, duly signed by all the
depositors and introductions obtained in approved manner?
(Irregularities observed in AOFs be given as per Annexure III)
(Please refer P&D Cir.No.1535 dt. 17.12.92 giving detailed guidelines about
the introduction aspect).
110412
Whether penal interest for late payment of instalments in R.D. Accounts as well
as charging of penalty for premature closure of FDs being done as per HO guidelines?
18
110413
Have you ensured that branch is not charging penalty in respect of premature
closure of FDRs when the same are renewed on account of hike in the rate of interest?
110414
Have you ensured that branch is offering the facility of renewal of FDR from back
date to any future date, which is not less than 46 days from the date the FDR is
offered for renewal.
110415
Whether overdraft limits are entered correctly in the Current Account ledgers
under full signatures of the Manager/Officer Incharge ?
110416
110417
Whether test checks of interest calculations and rate of interest allowed have
been made in a few accounts and found to be in order (discrepancies in this
regard be given as per Annexure IX)?
110418
Has the branch resorted to window dressing during the period under review.
If yes, modus operandi adopted be given in detail?
110419.
110420
Index Register
110421
110422
110423
110424
110425
Whether Inoperative Savings Bank accounts which remain inoperative for one
calendar year having a balance of below Rs.20/- are being transferred and credited
to miscellaneous Income and customers being intimated about the closing of the account?
110426
Have you verified that the amount of deposit is being mentioned in the AOFs for
FDRs in each case?
(1105)
110501
110502
Whether entries older than 15 days are being persued with the defaulting
branches/concerned Zonal Offices.
19
110503
110504
110505
When the amount involved is large whether the issuing branch is immediately
contacted to enquire as to the authenticity of the draft?
110506
Whether the branch is promptly pursuing the non-receipt of advice with the
drawing branch and entries are not allowed to remain outstanding beyond a fortnight?
110507
110508
110601
(1106)
110602
Whether account(s) with some banks are in-operative and whether you are
satisfied bank with the Branch Managers comments for not closing such account(s) ?
110603
110604
Whether idle bank balances are promptly transferred to H.O. Accounts Deptt.?
(Inspecting official should attach figures of bank balance on fortnightly basis
since the date of last inspection as per Annexure VIII).
110605
110606
110607
110608
Whether limits fixed with other banks (TT Discounting Limit) are reasonable?
If no, views of the BM be taken in this regard.
110610
IMPREST CLEARING
110701
(1107)
110702
Whether there are long outstanding entries under this Head pending
reconciliation; if yes, whether differences located and satisfactory efforts being made to
reconcile the imprest clearing a/c?
(Details of outstanding entries be given as per Annexure IV (a) )
DNR/DNP ACCOUNT
110801
(1108)
Whether all the entries in the DNR/DNP A/Cs represent genuine debits/credits?
110802
Whether there are any long outstanding entries under DNR. If yes, whether
detailed particulars noted in cheque returning register (details of outstanding entries be given as
per Annexure IV(b) and IV (c) ) ?
110803
Whether in case of DNR. Branch is resorting to the practice of keeping the
cheques in DNR A/C and releasing the same next day by deposit of cash and adjusting the entry
by transfer entry instead of reversing the clearing?
DAY BOOK/GL/GLB
(1109)
110901
110902
110903
Whether each and every entry initialed and necessary checking certificate
being given in the day book?
110904
110905
110906
110907
Whether various subsidiary books and registers are properly maintained and
their summations are tallied up to date with the GL?
110908
Whether the transfer scroll is properly maintained and totals tallied with GLB
transfer head?
(1110)
111001
Whether proper books are maintained to record all individual items and no
unauthorized transactions have been put through Sundry Debtors account?
111002
Whether all debits in Sundry Debtors a/c are approved by the Manager?
111003
Whether there are any long outstanding entries (Agewise details & comparative
position of entries are to be given as per Annexure V(d) and V (g)?
111004
EXPENDITURE
(1111)
111101
Whether all debits to various expenditure heads since the date of last inspection
are in order & relative vouchers are being signed by the Branch Manager?
111102
Whether all items of Charges General, Stationery consumed etc. are within the
discretionary power of the Branch Manager?
111103
111104
Whether powers for charges general are being used judiciously by the BM ?
111105
Stationery?
111106
111107
111108
Whether calls made on behalf of customers are being debited to their accounts?
22
111109
Whether telephone bills paid by the branch are in order and routed through
Sundry Dr.A/C pending receipt of approval from ZO.
111110
111111
PERSONNEL MATTERS
(1112)
111201
111202
111203
Whether Income Tax/PF and other deductions are deposited with the
concerned authorities and proper receipts obtained thereof and kept
on record?
111204
111205
Whether instalments of staff loans are being deducted every month regularly
from the salary and IBR dispatched soon thereafter?
111206
Whether advances outstanding against the staff are proportionate to the bills
submitted, whether bills are submitted in time, proper follow up of these
entries is made and got adjusted within 30 days?
111207
Whether leaves to the staff members are being sanctioned according to the
stipulated norms and leave applications are being tendered by them before
proceeding on leave and whether leave record is being properly maintained
at the branch?
111208
Whether Festival advance, TA and LFC leave encashment, medical, salary and
overtime etc. are being paid in accordance with the laid down instructions and the requisite
registers properly maintained.
111209
effectively?
Whether the staff members are trained properly to perform their duties
111210
111211
111212
111213
111214
111215
keeping?
Whether staff is motivated to clear the pendency of work and update house
111216
Whether staff movement register is maintained properly and entries being
authenticated by the BM?
111217
Whether leased accommodation rent/HRA is being paid as per sanction/OSR/
settlement and whether 6% of Basic Pay at initial stage/standard rent is being deducted at source
regularly where leased accommodation is provided to the officer staff?
111218
111219
Whether key result areas determined and confidential reports of staff for the
current year submitted?
111220
Whether all the pending transfer orders of the staff have been implemented?
111221
Whether in case of car loans to staff members, insurance amount is borne by the
staff members from their own sources and is not being debited to the loan account?
SECURITY ASPECTS
(1113)
111301
Has the security classification of the branch been done and advised by the ZO/HO
Security Department?
111302
Whether two guards are posted and two guns have been provided for high risk
branches?
111303
branches?
Whether one guard is posted and one gun has been provided for normal risk
111304
111305
111306
Whether cash safe is embedded if the branch is not having strong room/whether
iron cage has been provided?
111307
111308
Whether main entrance collapsible gate is chained and locked (with sufficient
opening to allow entry of one man only at a time) during banking hours?
111309
Whether window service provided in rural branches in Punjab & adjoining
districts and whether restricted entry system introduced if window service is impossible in rural
branches?
24
111310
Whether collapsible gate at main entrance kept closed after banking hours and
entry of outsiders properly controlled and scanned?
111311
Whether grill gate of strong room kept locked during the day?
111312
Whether cashiers cabin kept locked?
111313
Whether the branch is maintaining gun movement register and guns are being
tested at periodical intervals?
111314
Whether locker room is kept clean and dressing table is in order & curtains are
clean?
FRAUDS/FOREGERY
(1114)
111401
111402
Whether the same has been properly looked into and reported and esired
action taken without delay?
In case of already reported frauds whether proper follow up is being done in
Respect of:
111403
Recovery
111404
111405
111406
F.I.R. lodged ?
MISCELLANEOUS
(1115)
STOPPED CHEQUES
111501
Have you verified that stopped cheques are promptly recorded in the stop
payment register and proper caution is recorded in the respective ledger account and instructions
suitably posted therein in all cases. Have you also verified that entries in respect of stale cheques
are regularly marked off in the stop payment register?
CORRESPONDENCE
(1116)
111601
Office?
Are you satisfied about the arrangements made for bringing dak from the Post
111602
111603
111604
111605
time?
STATEMENT REGISTER
(1117)
111701
Whether statement register is properly maintained and all periodical returns
prescribed by HO are correctly compiled and promptly dispatched to HO/ZO within the
prescribed time schedule? (details of control returns not submitted for a long time should be
given as per Annexure XXI of Appendix B).
DEPOSIT VAULT/LOCKERS
(1118)
111801
procedure?
Whether working of the safe deposit vault is in accordance with the prescribed
111802
Whether locks of surrendered lockers are inter-changed before leasing them again?
111803
Whether proper safeguards are observed in respect of control of vault and the
main keys?
111804
Whether keys of vacant lockers tally with the chart provided for this purpose.
If not, give details?
111805
Whether nomination facility being provided and relevant forms obtained and kept
properly in record? Details of locker rent in arrears be furnished as per Annexure V(f)
111806
111807
H.O. EXTRACTS
(1119)
111901
Have you verified that H.O. extracts are being sent to H.O. Reconciliation
Department/Z.O. respective regularly as per instructions, whether they are submitted complete in
all respects i.e. branch codes (credit/debit), full digit of IBRs issued/responded and amounts are
legibly recorded, self branch code and date of extracts being recorded neatly in the boxes
provided, summary of H.O. Account position is being filled properly, opening and closing
balances tally with that of GL, totals of credits and debits are actuals as per transactions
recorded and whether the entries recorded in H.O. extracts are being authenticated by the
concerned officer. Have you looked into pending correspondence also from H.O. Reconciliation
Department? (Refer H.O. Reconciliation Deptt. Cir.No.9/92 dt.1.08.92 in this regard).
26
POSTAGE
(1120)
112001
Whether postal receipts of Registered/insured letters dispatched are recorded daily
in the dispatch register and relative postal receipts are crossed under date in token of their
checking, whether dispatch register is checked daily and summary of stamps used, details of
unused stamps and cash in hand is prepared daily ?
112002
Whether the branch is maintaining inward and outward register for telegrams and
telex and whether all telegrams/telex messages sent on behalf of customers are
debited to their respective accounts.
MARGIN MONEY
112101
(1121)
Whether reversal of entries from margin money a/c is properly accounted for?
(1122)
112201
112202
112203
Whether usance bills in hand are properly accepted, adequately stamped and
their due dates correctly worked out?
112204
Whether bills in hand are tallied with GL and verified documents of title of
goods in each case?
112205
112206
Whether all bills in hand are properly presented and intimations thereof sent to
drawees promptly? (List of overdue bills lying with the branch may be given as per Annexure V
( c) ).
27
MANAGER CHEQUES
112301
(1123)
Whether effective follow up measures are being taken for the adjustment of old
entries.
(comparative position of outstanding entries may be furnished as per
Annexure V (a) ) .
(1124)
112401
In case where a Sr.No. allotted to the draft is found missing or a different number
is received, have you ensured that the drawee branch has taken up the matter with the drawing
branch for seeking confirmation and there is no unusual delay?
112402
Whether all entries of stale drafts and MCs have been transferred to unclaimed
drafts payable account?
112403
Whether all T.T.s are being serially numbered branchwise and recorded in the
T.T.s sent and received registers accordingly. Further, whether all procedural instructions are
being strictly followed?
112404
Whether T.T. Codes 1 and 2 are kept separately and code No. 1 and 2 are not
being used by the same person?
(1125)
112501
Whether instructions laid down in respect of acceptance of shares and securities in
safe custody are duly observed?
112502
Whether half yearly confirmations are obtained from customers in respect of
shares/securities held and their signatures duly verified?
112503
Whether balances of securities and shares in the ledger are tallied with the balance
in the register periodically? And interest and/or dividends are realized in accordance with the
customers mandate?
112504
Whether branch is maintaining securities in and out register on prescribed lines
for recording the movement of securities and shares?
112505
(1126)
112601
Whether old record requiring destruction has been properly dealt with in
accordance with the prescribed procedure? (Ref.P&D Cir.No.732 dt.13.3.84).
112602
Whether branch records are properly kept and recorded in Record Register?
112603
Whether vouchers are properly numbered, stitched and recorded in the voucher
register and checked by the Manager/Second Man?
112604
maintained?
Whether voucher movement register and old record register are properly
MISCELLANEOUS/OTHERS
(1127)
112701
Whether signature books of authorized officers of RBI are kept in the personal
custody of the branch incharge and the same is kept uptodate?
112702
Whether banks books of authorized specimen signatures are properly kept and
prompt action is taken on correction list?
112703
Whether code book and check symbol duly corrected uptodate are properly kept
and do they at all times remain in the custody of and are only handled by an authorized official?
112704
Whether the security registers of DD/FD/MT/MC issued being tallied and are
duly signed by Branch Incharge and second man daily and checked with security items while
taking them to strong room ?
STATIONERY
(1128)
112801
Whether items of stationery are properly recorded and tallied with Balance of
Stock of Stationery?
112802
Whether security forms in use remain during office hours in the custoy of
authorized persons as per laid down norms and kept in safe in the strong room after closing
hours?
112803
112804
Whether any SCRA relating to Stationery supplied is pending with the branch?
112901
(1129)
112902
Whether they tally with furniture and fixtures register maintained for the purpose?
112903
112904
112905
112906
112907
112908
Whether appropriate steps taken to renew the lease. If it has already expired or
going to expire shortly?
112909
112910
Whether communication with regard to insurance of furniture and fixture items
has been received from H.O. Accounts Department and kept on record?
112911
Whether details of obsolete and broken furniture and other items given to ZO
seeking instructions for disposal?
112912
112913
DISBURSEMENT OF PENSIONS
(1130)
113002
Whether the Pensioners Portion of PPOs has been given to the pensioners?
113003
113004
Whether the PPOs kept under the custody of a responsible officer in the branch?
113005
Whether certificates required under the scheme are being obtained on due date?
30
113006
Whether the payments noted simultaneously in the Pension Payment Account
Register when the amount of pension is credited to the pensioners accounts?
PAYMENTS OF PENSIONS
113007
date?
Whether the amount of pension credited to the pensioners accounts on the due
113008
Whether the accounts to which pensions are credited are single accounts in the
individual names of the concerned pensioners?
113009
Are there operational instructions to indicate that operations in the accounts are
permissible by the pensioners themselves and not by their attorneys or authorized agents?
113010
rates?
Whether the amount of relief in pension has been paid to the pensioners at correct
113011
Whether the recovery of Income Tax has been made as required under the schem?
113012
Whether the pension has been reduced only from the date of payment of
commuted value of pension as laid down in the scheme?
113013
Whether in case of death, pension has been drawn for the day of the pensioners
death irrespective of the time of death?
113014
Whether a prominent note of the date from which family pension at the normal
(lower) rate to commence kept in red ink in the Pension Ledger Accounts of the family
pensioner?
113015
Whether the family pension has been reduced/paid at the lower normal rate?
113016
Whether the payments made to the pensioners have been noted in the Disbursers
portion of the PPO ?
SCROLLS
113017
month?
Whether the payment scrolls submitted to the link branch by the 10th of the
113018
Whether the pension payment scrolls are being prepared correctly according
to different payment schemes?
IN THE LINK BRANCH
113019
113020
Whether an impression of the special seal of the treasury officer together with
the specimen of his signature maintained?
113021
113022
Whether the payment scrolls submitted to the office of RBI of State bank of
India or its subsidiary conducting Govt. business at the center by the 15th of month?
113023
113024
113025
Whether full particulars of each pension case along with the amount of pension
restored have been intimated to the accounts officer which had issued PPOs
for verifying the correctness?
CLEARING
(1131)
113101
113102
113103
113104
113105
113106
32
(2200)
220001
Whether the branch is in possession of the relative original title deeds or the
Mortgage Deed duly registered?
220002
220003
220004
Whether requirements pointed out in legal opinions, particularly those relating to
obtaining mortgage permission from competent authority in case of leased properties, permission
under Urban Land and Ceiling Regulation Act 1976, mutation, latest property tax receipts,
previous chains of title deeds etc. are complied with?
220005
Whether entry relating to equitable mortgage is properly entered in the Title Deed
Register?
220006
220007
Whether the title deeds once deposited are not delivered to the customer. Where,
however, the same are required for perusal by any authority, have the same been presented
before such authority through a Bank Official Bank Counsel.
220008
Whether legal opinion states clearly that the owner of the property has a clear and
marketable title to the property and that the property can be validly mortgaged to the Bank by
way of Equitable Mortgage/Registered Mortgage.
33
CONSUMER LOANS
(2201)
220101
Whether the quantum of loan sanctioned, the amount of instalments, total
repayment period, and margin etc. are within the limits prescribed by the Head Office?
220102
Whether the loans have been granted only to persons with regular monthly salary
or proper repaying capacity?
220103
Whether letter of undertaking is obtained, wherever possible from the employer of
the borrower agreeing to deduct the amount of instalments from the borrowers salary and remit it
to the Bank directly?
220104
Whether the consumer loans are granted for purchase of new consumer articles of
standard companies which generally carry a performance warranty for a minimum period of six
to twelve months?
220105
Whether the disbursement of the loan is by means of cross pay order issued in
favour of the dealer and original invoice and receipt (and copy of Registration Certificate in case
of Vehicles) are obtained and kept on bank record?
220106
Whether the consumer goods purchased are insured against fire and other risks
wherever necessary?
220107
Whether it is verified from time to time that the consumer goods purchased are in
working condition?
220108
Whether in cases, wherever default occurs, prompt action is taken for recovery of
the banks dues?
220201
(2202)
Whether all Govt. securities have been duly endorsed in favour of the bank
and endorsements got registered wherever necessary?
34
220202
220203
Whether shares held are got transferred in the name of the bank in case of
advances of over Rs.3.00 lacs against shares?
220204
Whether debentures held as security are got transferred in the banks name?
220205
220206
220207
220208
Whether shares of Private Limited Companies/Partly paid shares and unquoted
shares are not accepted as security and advance is granted against the shares/debentures of only
those companies which are approved by H.O. from time to time (Please refer ID Circular
No.1408 dated 28.01.94 in this regard).
220209
Whether the shares held are accompanied by adequate No.of blank transfer deeds?
220210
Whether the bank has accepted securities are mutilated or damaged and the chain
of endorsements appearing thereon is broken?
220211
220212
220213
Whether the drawing power is revised on the basis of latest valuation reports
of stock exchange?
(2203)
220301
220302
Whether lien is marked on the deposit receipt as well as on the respective ledger
folios under full signatures of the authorized officer with date?
220303
Whether letter of undertaking for utilizing loan amount for minors benefit and
indemnity bond are obtained from guardian while advancing against minors deposit?
220304
Whether RBI Directives in regard to margin, rate of interest etc. are strictly
complied with and in case of premature encashment of deposit or adjustment of
advance rate of interest charged on the advance is also reduced accordingly?
35
220305
Whether advances are allowed to continue after the date of maturity by renewal
of the relative deposits?
220306
220307
Whether in case of advance against deposit of other offices, an acknowledgement of having noted the lien on the FD by the issuing branch has been
obtained and kept with the security documents?
(2204)
220401
Whether the assignments in favour of the bank are duly registered with the
LIC and original policies with such endorsement held on bank record?
220402
Whether latest surrender value has been obtained and the advance is within
the stipulated margin?
220403
220404
220405
Whether the age of the assured has in all cases been admitted and the policies
are in full force and have been recorded in the documents register?
220406
Whether undated surrender letters have been held for each policy.
(2205)
220501
220502
Whether loan in any case has been disbursed from sundry debtors account
pending receipt of sanction?
220503
Whether all the stipulations of the sanction regarding margin, rate of interest
amount of instalments, direct payment to dealer etc. are complied with?
220504
Whether end use is ensured and all the requisite documents/papers viz.
invoice/receipt/insurance/copy of Registration Certificate etc. are obtained
and kept on bank record.
220505
properly created, loan is disbursed in stages and the bills showing the cost
incurred are held on record?
220506
Whether the property is got insured against various risks stipulated in the
sanction/HO instructions?
220507
Whether the instalments in all staff loan accounts are invariably deducted
from salary in terms of H.O. Staff Cir.letter No. 490 dated 21.08.89?
HYPOTHECATION/PLEDGE OF GOODS
(2206)
220601
220602
Is the gap between the date of the statement and the date of receipt at
branch reasonable and properly explainable to your satisfaction?
220603
Whether all the columns of statement are properly filled in by the party
and duly signed?
220604
Whether the stock statements are scrutinized by the branch and drawing power
arrived at after maintaining the margin and noted in the drawing power
register/ledger?
220605
Whether proper and upto date stock register is maintained by the borrower and
stock statement submitted tally with the register.
220606
Whether the stocks pledged/hypothecated are periodically checked by the branch
manager/officers surprisingly without informing the borrower?
220607
Whether godown inspection reports are being sent at Zonal Office regularly?
220608
Whether the branch is holding original/certified invoices on the basis of which
stocks have been evaluated and no advance is being allowed against unpaid stocks?
220609
Whether the valuation of stocks pledged/hypothecated has been made on the basis
of cost price or market price, whichever is lower?
220610
220611
220612
220613
220614
220615
220616
220617
220618
Whether the Daily CC balances are taken down promptly and tallied with
General Ledger?
Whether the godowns storing pledged goods are independently accessible?
Non-independently accessible godowns have been accepted after obtaining
Proper sanctions and Non-Objections?
220619
220620
Whether all doors to godowns having stocks under pledge are secured by Banks
padlocks which bear the name of the Bank engraved in full and that Banks name
plates are prominently displayed both outside and inside all such godowns?
220621
Whether the keys of the godowns are promptly kept after use in safe custody in
the strong room under the dual control of the Manager and the Officer Incharge Loans
Department?
220622
Whether the duplicate keys of godowns are sealed by the godown-keeper in a box
and placed in Safe custody under dual control of the Manager and the Officer Incharge Loans
Department?
220623
Whether all windows, ventilators and doors other than the main door are securely
grilled from inside, the walls are built upto the roof and godowns are free from
dampness etc.?
220624
Whether the borrowers are submitting all financial statements including income
tax and wealth tax returns for timely reviewal of limits?
220625
Whether stocks are adequately insured against fire, burglary risks etc. and
policies with bank clause, are held on record?
220626
Whether charge has been got registered with the Registrar of Companies in
case of hypothecation advances to limited companies, and charge certificate
held alongwith documents?
220627
220628
Whether the sale proceeds are routed through the CC account and are
comparable to the partys sales turnover?
220629
220630
220631
That the borrower is not having CC facility with other bank/non hypothecated
the same stocks to another bank?
220632
That the godown does not contain goods which are not pledged to the bank
38
That there is no variation in the stocks as per Balance sheet and the stocks
hypothecated/pledged as on the date of Balance Sheet?
220635
That in case of consortium advances there is proper arrangement for inspection of
stocks, exchange of information between the banks as regards conduct of the account and that
other formalities such as obtaining of resolution, registration of charge etc. are complied with?
220636
That Health Code wise classification of advances has been done correctly and
the same has been confirmed by the Zonal Office?
(2207)
220701
Whether the advance against bills is allowed against sanctioned limit and Branch
manager does not allow such facility to a party who is enjoying other facilities under sanction
from ZO/HO without their specific approval?
220702
220703
Whether DA/DP Bills Limits are kept segregated and are not intermingled
without the approval of sanctioning authority?
220704
Whether bills are not overdetained and where overdetained, action is taken to
enquire fate of the bills and its early realization?
220705
Whether the bills in respect of goods in which the borrower does not deal are
not purchased/discounted?
220706
220707
220708
Whether DA Bills are drawn as per the tenure approved in the sanction letter?
220709
Whether credit reports are maintained & periodically reviewed in respect of the
drawees, particularly those on whom bills for larger amounts are frequently drawn?
220710
Whether when bills drawn on a particular drawee are received back unpaid or
generally not paid in time, due precautions are taken before accepting fresh
bills on such drawees?
220711
Whether the party-wise bill purchased register is well maintained and all the
entries of bills purchased/realized/returned unpaid being duly routed through it?
220712
220713
220714
Whether the branch is accepting the Transport Receipts of approved Transport
Companies issued in IBA approved format only and that bills accompanied by only those
Transport Receipts/Railway Receipts have been purchased/discounted, where the consignee is
Bank?
220715
Whether the overdue bills against which advance is outstanding, are deleted from
the DP/transferred to bills for collection?
220716
Whether the irrevocable Power of Attorney executed in Banks favour are duly
registered with Govt. Departments in case of advance against Govt. Supply Bills?
220717
Whether only the genuine bills/cheques arising out of normal trade transactions
are purchased/discounted?
220718
steps taken?
220719
Whether the bills returned unpaid and not reimbursed immediately are transferred
to the Past due and Dishonoured Bills account and notices of dishonour are
promptly issued to all the parties liable on the dishonoured bills?
220720
220721
Whether the bills returned unpaid are reported to the Zonal Office?
Whether due date diaries in respect of usance bills are maintained properly?
220722
Whether it is ensured that the goods in transit are adequately ensured for
TPND (Theft, Pilferage, non-delivery) flood, and against riots and civil
Commotions etc.
LETTERS OF CREDIT
(2208)
220801
Whether it is verified that all the LCs issued are backed by relative sanction and
are properly recorded in LC issued register?
220802
220803
Whether it is ensured that LCs are not issued in favour of sister/allied concerns
of the buyer/customer?
220804
Whether the branch has obtained underlying sale contract between the buyer and
the seller/supplier?
220805
220806
Whether balances under Party-wise Register extracted and tallied with the
outstanding as per LC Issued Register as well as the general ledger?
40
220807
220808
220809
Whether I.Cs are issued under the joint signatures of Branch Incharge and
senior most officer/officers incharge loans department of the branch?
220810
Whether the LCs are examined carefully at the designated branch to ensure that
these have been issued by the opening branch authorisedly?
220811
220812
Whether bills negotiated under the LCs are promptly paid and where not
paid on presentation, the branch charges the over due interest besides
observing other safeguards?
220813
Whether counter guarantee of the party on whose behalf the LC has been
issued and also of the guarantees specified in the sanction have been obtained?
GUARANTEES
(2209)
220901
Whether it is verified that all the guarantees issued are backed by relative
sanction and are properly recorded in guarantee issued register?
220902
220903
220904
220905
Whether counter-gurantees have been obtained from the constituents and in case
of counter guarantees obtained from limited companies the same are backed by
appropriate board resolutions?
220906
Whether guarantees are issued under the joint signatures of branch incharge
and senior most officer/officers incharge loans department of the branch?
220907
Whether the counter guarantees obtained are adequately stamped and signed
by duly authorized persons and additional securities/guarantees have been properly documented?
220908
Whether bank guarantees are issued along with a covering letter as per the
proforma prescribed vide H.O. Advances Deptt. Cir.Letter No.89/93 dated
06.12.93.
41
220909
Whether in case of Deferred Payment Guarantee, charge by way of hypothecation of machinery is obtained and the same is also registered with the Registrar of Companies,
where such a facility is allowed to a Ltd. Co.?
220910
date?
Whether instalments under deferred payment guarantee are paid in time on due
220911
guarantee?
Whether due date diary has been properly maintained for deferred payment
220912
(2210)
221001
221002
221003
221004
Whether any efforts are being made for amicable settlement of dues to
avoid litigation?
221005
Whether expenses incurred in these accounts subsequent to filing of suit are
charged to Litigation Suspense or Law charges account with the approval of H.O. Law &
Recovery Department.
221006
Whether in suit filed cases, copies of the suit plaint are kept on record and
whether the case is being pursued actively by the branch and the lawyer?
221007
Whether in decreed cases, certified copies of decrees have been obtained and
execution proceedings are properly taken well before the decree gets time barred?
221008
Whether the suit register and the decree register are properly maintained and
checked and are always kept uptodate?
(2211)
221101
Whether the statement of Book Debts with age of each book debt is obtained
every month and the debts beyond stipulated period i.e. more than 6 months
old are excluded while calculating drawing power?
221102
221103
221104
Whether the branch obtains the power of attorney in favour of the bank duly
executed on stamped paper and registered, wherever required?
221105
Whether the Branch is verifying book debts with borrowers books of accounts
and original orders to verify that the book debts have arisen out of genuine
trade transactions?
221106
(2212)
221201
221202
221203
Whether the temporary unsecured overdrafts allowed by the BM are within his
discretionary powers and are granted only in such cases which conform to the
guidelines issued by H.O. from time to time?
221204
In case answer is in negative to 221203 above whether such cases were reported
to the competent authority and action got confirmed?
221205
221206
Whether valid security documents are held on record and financial papers of such
parties kept on record and credit reports prepared?
221207
Whether outstanding under clean overdrafts are taken down daily and tallied with
the General Ledger?
221208
221209
Whether same parties or their sister/allied concerns are frequently allowed such
facility?
43
(2213)
221301
Whether the advances are made only to persons properly introduced to the Bank?
221302
Whether branch is maintaining a complete record of all the Ornaments & Bullions
held as security regarding the description, gross and net weight fineness etc?
221303
Whether the shroof, approved Govt. valuers certificate about net gold content
along with valuation thereon is held by the branch in all cases?
221304
Whether the jewellery/bullion is held under the joint custody of bank officials?
221305
(2214)
221401
221402
221403
221404
221405
Whether notices of dishonour issued to all the parties liable on the bills?
221406
Whether dishonoured bills have been got noted/protested through Notary Public?
221407
221408
221409
Whether outstanding in the past due and dishonoured bills ledger tallied with the
General Ledger?
SICK UNITS
(2215)
221501
Whether all industrial accounts, both SSI (including tiny and decentralized sector)
and medium and large have been reviewed and whether any such account is showing signs of
sickness (indicative list given in ID Cir.No.1289) and if yes, whether corrective steps have been
taken to ensure that the unit does not become sick?
221502
Whether all industrial accounts both SSI (including tiny and decentralized sector)
and medium and large have been reviewed so as to ensure that no such account has become sick
in terms of definitions as laid down by RBI and/or Sick Industrial Companies (Special
provisions) Act 1985 (SICA) and as conveyed by H.O. Circulars from time to time (refer I.D.Cir.
No. 1289 and Circulatory letter No.84/93 dated 17.11.93). If any such account has become sick
as per the definitions whether the same has been identified as sick unit in terms of I.D.Cir.
No.1289 dated 29.12.89?
221503
If there are sick units identified as per (221502) above whether viability study for
the same has been conducted within 21 days of the date of identification in terms of RBI
guidelines?
221504
Whether in respect of potentially viable sick units, the rehabilitation package has
been drawn and the same has been got approved from the appropriate authority
within 3 months from the date of identification as sick unit?
221505
221506
Whether in respect of all non-viable sick units steps are being taken by the branch
for recovery of the balance outstanding including one time settlements and filing
suits etc.
221507
Whether the branch is quarterly reporting the position of all the sick units on the
prescribed proforma in terms of ID Cir.No.1384 dated 04.05.93 to the controlling offices as
specified in this circular?
45
221508
Whether separate reporting on Form C as per I.D.Cir.No.1289 in respect of those
SSI Sick Units (including Tiny and Decentralised sector) where the borrower is either nontraceable or the assets have not been created is being done?
221509
Whether DICGC claims in respect of non-viable sick SSI units have been lodged?
221510
Whether in respect of all the sick industrial companies as defined by SICA (ID
Cir.1289) the branch has sent necessary papers to H.O. for making reference to BIFR ?
PRE-SHIPMENT ADVANCES
(3300)
330001
Whether the borrowers are holding exporters code no. allotted by the RBI?
330002
330003
Whether packing credit contract-wise register and party-wise register maintained
and separate accounts in respect of each borrower maintained properly?
330004
Whether the disbursement of packing credit are linked to actual purchases of raw
material and goods?
330005
Whether the periodical inspections of goods and inventory carried out and stock
statements are received in time and regularly?
330006
Whether the interest is charged for periods and at rates laid down by the RBI?
330007
Whether the packing credit advances are adjusted within the prescribed periods?
330008
In case where extension of time is granted, whether partys request for extension
of time is held on record & permission from RBI obtained wherever necessary?
330009
Whether packing credits are adjusted by negotiation of relative export bills only?
330010
330011
Whether all packing credit advances are covered under whole Turnover Packing
Credit Guarantee by the bank and guarantee fee sent every month regularly?
330012
Whether ECGC policy is obtained by borrowers for individual buyers for their
whole turnovers?
46
330013
Whether in cases where the exporter fails to effect shipment, normal rate of
interest as well as penal interest charged for the entire period of advance and
interest subsidy, if any claimed, is refunded to RBI?
330014
In case of Packing Credit remains outstanding beyond due date, is the branch
transferring it to overdue head promptly and charging overdue interest?
330015
330016
Reporting of limit
within 30 days
330017
330018
Payment of premium
Reporting of overdues
330019
330020
Reporting of default
Lodgement of claim
330021
Is the branch endorsing order/LC against which Packing Credit is being permitted.
(Further branches are to keep the ORIGINAL order/or LC in their record. In case
original order/LC is to be released to party for some reasons branch must retain
photocopy of confirmed order/LC indicating the endorsement of bank granting
Packing Credit against such confirmed order/LC in banks record. In case running
account facility is permitted the order/LC is to be submitted in due course). Is the branch
pursuing and receiving from the party the order/LC in stipulated time.
330022
In the accounts not falling under Health Code-1, whether branch office is taking
permission of ECGC for accommodating parties beyond discretionary limit fixed by ECGC
under WTPCG. (The limit under WTPCG at present is Rs.20.00 lacs).
Whether Packing Credit allowed against the oder/LC is adjusted first out of
47
330110
Is branch office taking permission of ECGC for accommodating parties beyond
discretionary limit fixed by ECGC under Whole Turnover Postshipment Guarantee. (The limit
under WTPSG at present is Rs.40.00 lacs. However, in case of account with Health Code 1 no
such prior approval is required?
330111
Whether the interest charged on export bills purchased/negotiated exceeds the rate
stipulated by the RBI?
330112
properly?
Whether the interest subsidy is claimed regularly and relevant records maintained
330113
In case bills remain outstanding beyond due date, is the branch transferring it to
Overdue Head promptly and getting the bills protested and charging overdue interest thereof?
330114
330115
Reporting of limit
Within 30 days
330116
Payment of premium
330117
Reporting of overdues
330118
Reporting of default
330119
Lodgement of claim
330120
Is the branch covering post-shipment advances under WTPSC or ECGC and
ensuring that party also covers the bills under ECGC Policy unless specific exemption has been
obtained from the appropriate authority? Is the branch accommodating the party within the limit
set by ECGC on each buyer?
330121
330122
Is the branch charging interest on quarterly basis on all overdue bills by debiting
current account of the party and the same are recovered promptly?
330123
330124
330125
330126
Is the branch crystallizing all bills remaining outstanding beyond due dates?
Whether physical inspection of the goods imported under LC carried out and
ensured that these are lying at port or stored in bonded warehouse?
330204
Whether it is ensured that adequate insurance cover is available and kept in force
till the bill is retired?
330205
Whether due date or the fact of Non-acceptance, as the case may be, is promptly
advised to the negotiating bank in case of usance bills?
330206
Whether it is verified that the importers concurrence or rejection is obtained in
writing without delay in cases where negotiation by foreign bank is under Reserve or
Guarantee?
330207
Whether it is ensured that where documents are in order, the drawee is not
permitted to refuse the documents?
330208
Whether it is ensured that all the import bills are retired to the debit of importers
account with the branch?
330209
330210
330211
Whether the outstanding bills in hand under import LC are checked by the
Branch Manager personally once a week?
330212
330213
330214
In case the bill is not paid, is the branch crystallizing the bill amount on the
10th day of receipt of the bill?
(3303)
330301
Whether advance is granted to exporters against their duty drawback entitlements,
as provisionally certified by Customs Authorities pending final sanction & payment?
330302
330303
330304
Whether normal commercial rate of interest is charged for the overdue period
beyond 90 days?
330305
In case the advance remains outstanding beyond due date, is the branch
transferring it to overdue head promptly ?
330306
330306
Reporting of limit
Within 30 days
330307
Payment of premium
330308
Reporting of overdues
330309
Reporting of default
330310
Lodgement of claim
50
IMPORTS
a)
(3304)
330401
Whether application of Form Imp. 1/1 duly signed and stamped obtained
from importer in each case?
330402
330403
330404
Whether the letter of credit issued are supported by valid import license or
are under O.G.L.?
330405
Whether the stipulated margin and commission are recovered prior to opening
of credit?
330406
Whether any back dated letters of credit are established subsequent to change
in the import policies?
330407
Whether the contra entries for controlling the letters of credit are passed
promptly?
330408
(3305)
(3306)
51
Annexure
CREDIT MANAGEMENT
(PRIORITY SECTORS)
AGRICULTURAL ADVANCES
(4400)
440001
440002
Whether in case of term loans, a certificate from the field officer or Branch
Manager regarding economic viability and Technical feasibility of the project
Financed is held?
440003
440004
440005
Whether animals have been insured against risk of mortality and are
tatttoed/branded with banks name?
440006
Whether no dues certificates have been obtained from other financial agencies
concerned or a certificate from our own field staff, on the basis of local enquiries, affidavits from
the borrowers in respect of state of their indebtedness are held by the branch?
440007
Whether disbursement of loan in cash or kind is evidenced by the borrowers
receipt for cash and/or for the goods purchased within the amount of loan as well as by the
sellers invoice, wherever possible?
52
440008
Whether loan documents are in order and have been kept alive by obtaining half
yearly balance confirmation slips?
440009
Whether all the securities relating to agricultural advances viz Tractors, pump-set,
implements etc. are fully insured against various risks with usual bank clause as
prescribed?
440010
Whether pre and post disbursement inspections were properly conducted? Are
securities periodically inspected as prescribed?
In case where payments is not forthcoming:
440011
Whether the default in payments is due to crop failure on account of natural
reasons over which the borrowers had no control or it is due to some other reasons considered
equally good as evidenced by record?
440012
Whether in case of default for good reasons, rescheduling or repayment
programme has been appropriately made or in case of crop loan, the loan has been converted into
term loan repayable over a suitable period?
440013
Whether in case of willful default, notice has been served on the borrower
and the guarantor, if any?
Whether in case where the default, has been persistent and ordinary methods of recovery have
failed to produce results, the provisions of Agricultural Recovery Act have been invoked? (in
the states where such Acts are in force).
440014
Whether in case of term loans which are highly irregular, the facts of the case
have been reported to the Zonal Manager and his permission to transfer the accounts to Protested
Advances and to file a claim with the Deposit Insurance and Credit Guarantee Corporation,
sought?
440015
Whether in cases considered fit by the Zonal Manager for transfer to Protested
Advances Account and filing claims with Deposit Insurance and Credit Guarantee
Corporation, claim actually has been lodged?
440016
Whether proper follow up measures have been taken by the branch to expedite
recoveries? Is due date diary maintained to ensure effective and prompt action:
440017
440018
440019
440020
440021
440022
440023
If any loan has become time barred or its limitation period is to expire within
6 months, has the Branch Manager taken appropriate measures to get the loan
adjusted or to extend the limitation period?
440024
Has the branch been invariably taking appropriate, prompt and effective steps
(by regularly issuing reminders and notices to and making personal recovery of over dues? If so,
what has been the cause of accumulation of arrears (whether willful default or mis-utilisation of
loans or unsatisfactory/poor repayment capacity of borrowers?
(4401)
SERVICE SOCIETIES
440101
Whether loans to the societies have been allowed with the approval of higher
authorities?
440102
440103
Whether it is ensured that the amount of loan was within the borrowing limits
of the Society as specified in its bye-laws?
440104
Whether proper loan security documents as prescribed by H.O. obtained,
including the deeds of assignment in favour of the bank of all rights the society
has over the assets of its members through charge/mortgage of land?
440105
Whether the accounts of the societies are audited and the copy of the audited
balance sheets held on record?
440106
Whether the banks field staff supervise the working of the societies at regular
intervals of time and ensure that there is a proper system to follow up the dues?
EDUCATIONAL LOANS
(4402)
440201
Whether advances have been extended to only deserving students whose parents/
guardians cannot afford such higher education without the bank assistance?
440202
Whether the borrowers are students of India Nationality with good academic
record and have secured admission in Govt. recognized school/college/
educational establishment?
54
440203
Whether the amount of advance has covered all necessary items of expenses and
repayment schedule provides sufficient gestation period to allow the students to settle down in
life by securing suitable employment or by starting independent vocation/profession?
440204
Whether the requisite undertaking, as prescribed under the scheme has been
obtained from the borrower viz.
440205
440206
That he would follow all the rules and regulations laid down by the educational
institution.
440207
That he would not change the course of studies or the place of study or the
institution or take up employment during the course, without the banks prior
permission in writing?
440208
440209
440210
Whether all the eligible advances have been overed under DICGC Scheme
and correct particulars along with the guarantee fee are being sent regularly
in time ?
(4403)
A) Direct Finance:
440301
Whether all vehicles financed stand registered and insured in the joint names
of the bank and the borrower and copies of Registration Certificate and
Insurance held on record?
440302
Whether payment is released directly to the dealer and the invoice and payment
receipts are held with the Bank in each case?
440303
440304
440305
440306
440307
Whether the borrower holds a valid route permit to ply the vehicle?
440308
Whether the borrower holds valid driving license in case of owner driven
55
vehicle?
440309
440310
440311
440312
440313
440314
440315
(4404)
440401
440402
b) Whether Hire purchase agreements specially drafted by the bank for such
type of business are held?
440403
440404
440405
440406
a) Whether periodical statement of hirers with amount due from them giving
the amount of arrears is obtained regularly from the finance company?
440407
440408
440409
(4405)
440501
440502
440503
Whether all eligible accounts are covered under DICGC Scheme and Guarantee
fee sent in time?
440504
440505
Whether the branch has satisfied itself that the shop is owned by the borrower
or is rented/leased in his own name?
440506
Whether the sale proceeds are being routed through the account?
440507
(4406)
440601
Whether the borrower is holding a recognized degree and diploma or otherwise trained/professionally competent and satisfies the eligibility criteria in
all respects?
440602
Whether the amount of credit facility sanctioned is adequate to take care of all
the legitimate requirements?
440603
Whether repayment schedule has been fixed on a realistic basis keeping in view
the gestation period required to establish the business/practice?
440604
Whether the income form professional service or from any other source regularly
brought in the accounts?
440605
440606
440607
To know the progress of the borrowers business as also his practical problems
with a view to helping him in tiding over his temporary difficulties and
440608
440609
Whether all eligible accounts are covered under DICGC scheme and guarantee
fee being sent regularly in time?
ADVANCES TO SMALL SCALE INDUSTRIES
57
(4407)
440701
Whether it is satisfied that the borrower is a small scale industrial unit as defined
(including village/cottage industrial unit/artisan, tiny sector, small scale ancilliary unit) and
certificate issued is held on record?
440602
440603
Whether the loan applications are disposed of within the stipulated period and
there is no undue delay in decision making?
440604
Has the Branch obtained prescribed loan application forms for term loan and
working capital facilities?
440605
440606
Whether permissible limits against raw materials, stock in process, finished goods
and receivables worked out correctly and whether the branch has satisfied about
the borrowers capability to meet permissible limits. (if any).
440607
440608
Whether the problems, if any, faced by SSI units are immediately attended
to by the Branch Manager?
440609
Whether all eligible accounts are overed under DICGC Scheme and requisite
guarantee fee is being sent regularly?
440610
440611
440612
Where working capital limits have been sanctioned to SSI units against
hypothecation of stocks, whether all check points as mentioned under hypothecation accounts
have been observed?
D.R. LOANS
(4408)
440801
Whether the loans under DRI Scheme have been allowed to eligible
borrowers only, who satisfy eligibility criteria in all respects?
440802
440803
440804
Whether the assets purchased with the loan are hypothecated to the bank
and in appropriate cases of loans to homogenous group of borrowers,
group guarantees are obtained?
440805
Whether all the DRI advances are covered under DICGC and Guarantee
fee etc. is charged to the Banks account?
440806
59
CHAPTER 4 (a)
Guidance List of Serious Irregularities
GENERAL ROUTINE AND HOUSING KEEPING
1.
2.
3.
Shortage/Excess Cash
Missing Telegraphic Transfer (TT) Code Books.
Loss of securities/security forms (Draft books, MC Books, FD Books, Cheque Books etc.
/Important keys.
4.
Large arrears in the balancing of various accounts/ledgers.
5.
Frauds/forgeries which have taken place since the previous inspection.
6.
Irregularities in staff accounts (cheques Purchased and Deposits of large amounts).
7.
Inordinate delay in submission of periodical returns/statements etc.
8.
Large accumulation of pending HO extracts.
9.
Inordinate delay/large arrears in the dispatch of IBRs/responding of IBRs.
10.
Entries outstanding for more than 6 months in OD suspense account. DPWA, IBSA.
Imprest clearing and DN R accounts.
11.
Excess stocking of stationery.
12.
Late payment of Income Tax Deptt. In respect of income deducted at source from salary.
13.
Non disposal of the previous Inspection Report.
14.
Irregularities brought out in previous Inspection Reports which are pending despite the
Branch Manager having certified in the relative remarks sent to Zonal Office that they have been
rectified.
15.
Any conspicuous instances of wastage of avoidable expenditure.
16.
Widows dressing of deposits of advances.
17.
A large number of instructions/recommendations in regard to Customer Service not being
implemented.
18.
Irregularities in the calculation and recovery of income/recovery due to the bank.
19.
Complaints from customers.
20.
Interest test checks of FDRs etc. not carried out.
21.
Suit filed against the Bank.
60
Cash
Security arrangements.
Branch documents.
Branch Keys
Securities held in Safe Custody.
Customer service.
Staff supervisory.
Staff Award.
Performance Budgeting.
General Ledger Balance (GLB) Slip
Deposit accounts.
Staff accounts.
DPWA,IBSA & POAB Accounts.
Imprest clearing DNR and DNP accounts.
TTs issued/paid/purchased.
Safe Deposit Lockers.
Balancing of Books.
House keeping Maintenance of Registers/Ledgers and other records.
Correspondence 9Inwards and Outwards).
Returns/Statements.
Security forms.
Despatch of Daily HO Extracts.
OD Suspense and Sundry Creditors accounts.
Charges General account.
25.
26.
27.
28.
29.
30.
31.
32.
33.
61
CHAPTER 4 (b)
Guidance List of Serious Irregularities
CREDIT MANAGEMENT
1.
All outstandings in Past due and dishonoured bills (PDDB), Protested Advances and
recalled debts.
2.
All clean overdrafts which are outstanding for more than six months.
3.
All advances which are irregular/overdue/sticky.
(Accounts which are irregular only due to the application of interest need not be reported unless
there are other unsatisfactory features attached to them).
4.
Missing/Time Barred documents relating to advances.
5.
Large scale arrears in renewal of credit facilities/revision of credit reports and non
submission of renewal loans proposals.
6.
Non submission of control returns to controlling offices and non factual reporting.
7.
Irregularities in Bills purchased business such as frequent Purchase of Cheques/Bills
without sanctioned limits, large scale returns of Bills purchased, delays in the dispatch of
instruments.
8.
Lapses in periodical inspection of Discounted/securities of borrowers.
9.
Serious irregularities in the follow up of advances resulting in mounting of overdues.
10.
Serious lapses noticed in regard to appraisal, sanction, disbursal of loans and conduct of
accounts, documentation, insurance etc. to the detriment of Banks interests.
11.
Serious irregularities in the handling of bills business like kite flying etc.
12.
Violation of banks instructions in regard to non-funded business.
13.
Violation of exchange control regulation/FEDAI Rules.
14.
Serious lapses in the opening of letters of credit like opening L/C after the validity period
of import license, without valid import license etc.
62
General
Protested Bills Account (Past Due and Dishonoured Bills)
Protested Advances (Others) and Recalled debts
Suits filed by the Bank
Particulars of irregularities in loan accounts (Priority Sector)
Particulars of irregularities in loan accounts (other than Priority Sector).
Particulars of Irregularities in Cash Credit Accounts.
Particulars of Irregularities in Foreign Exchange Accounts.
Govt. Sponsored Schemes.
Staff Accounts.
Inland Letter of Credit.
Bank Guarantees.
Deferred Payment Guarantees
Bills Purchased (cheques)
Bills Purchased (Others)
Bills Discounted
Import Letters of Credits.
Import Bills under Letter of Credit.
Bills of Entry Forms
Preshipment Advances
Post shipment advances.
Non Resident Accounts.
63
1.
You will have to check and certify correctness of cent percent interest earning of
borrowal accounts, dicount, commission earned on bills, cheques purchased, letter of credit,
letter of guarantees and all other incomes on account of service charges in terms of various
circulars issued from time to time on the subject (copies of circular in the booklet).
2.
You will also have to check 100% accounts in respect of interest paid on all deposits, so
as to ensure that interest paid on deposits or accrued thereon has been vouched correctly.
3.
The fee payable is inclusive of all expenses, no separate claim for TA/DA or any liability
is admissible. The bills for payment may be sent directly to the concerned Zonal Inspectorate
longwith copy/copies of the Revenue Audit Reports.
4.
Five copies of the Audit Reports (strictly as per enclosed format) have to be prepared and
submitted as under:
i) Original to be sent to H.O. Inspection Department.
ii) Second copy to the concerned Zonal Inspectorate.
iii) Third copy to the concerned Zonal Office.
iv) Fourth copy to be handed over to the Branch Incharge.
v) Fifth copy to be retained by the Auditors for their own record.
5.
You have to ensure that the discrepancies observed in the branch(es) are discussed with
the Branch manager on day to day basis. The observations made in a day may be handed over to
the Branch Incharge so that the recoveries are effected expeditiously.
6.
This offer is subject to the condition that you are entitled to practice as a firm of
Chartered Accountants and that your firm as well as sister/associate concerned, if any, are not
entrusted with any Statutory Audit of this bank during the year 2002-2003.
7.
You are not subject to any disqualification under Section 226 of the Companies Act,
1956, you will keep secrecy of the bank affairs that come to your notice during the course of
audit.
8.
A letter of authority addressed to Branch manager for taking up the assignment is
enclosed herewith.
64
9.
Please note that if the check list/guidelines are not followed and/or the report is not
compiled as per the check list, the same is likely to be rejected and no remuneration shall be
paid.
10.
A separate report shall be submitted, if any mala-fide intention of the staff is detected in
under charging the interest revenue leakage with full details and name of the erring officials.
11.
The discrepancies observed shall be discussed with the Branch Manager and where there
is any point of disagreement on your observation, the same shall be reported in the remarks
column of the report or in a separate report alongwith the Branch Managers views.
12.
Please identify reasons for leakages of revenue and also suggest corrective measures
thereof.
13.
In cases, where no/negligible recovery is detected under some heads, the details thereof
be furnished in the format as per annexure.
14.
Auditors are advised to thoroughly check:
i) Not only the calculation of products and arithmetical accuracy of interest bu the accuracy of
rate of interest applied by branches.
ii) Application of interest on drawings allowed against uncleared effects, cheques returned
unpaid, adhoc limits allowed, protested/NPA accounts etc.
iii) Penal rate of interest on account of non-submission of stock statements/QIS/Delay in
renewal of limits.
iv) Revenue leakage on DDs/Bills purchased which is one of the major areas of revenue
leakage.
v) Recovery of processing/up-front fees and commission on LCs/Guarantees.
vi) Inspection charges and Incidental Charges in CC/Current Accounts.
vii) Interest/Commission and remuneration in lieu of foreign exchange business.
viii) Payment of one time interest on deposit accounts particularly on term deposits. Those term
deposits which have been paid before maturity must invariably be checked thoroughly.
ix) Provisions for interest made by branches.
x) Recovery of telephone/telex/telegram/postage expenses for customers/employees and wide
variations on account of expenses on telephone, postage and telegrams.
xi) Salary paid to staff on a test check basis with emphasis on increments, LFC/ Medical
reimbursement and Officiating allowances.
15.
We have tried to include all major relevant circulars in the booklet provided. However,
these may have to be supplemented with other circulars/guidelines issued by the bank which are
available at the branches. In case of any problems please feel free to contact concerned Zonal
Office/Zonal Inspectorate/HO Inspection Department.
65
5.
To examine whether any fictitious accounts are operating wherein the cheque purchase
facilities have been allowed and loans have been granted with a view to concealing the
fraudulent transactions.
6.
To examine impersonal accounts with a view to check whether any fraudulent
transactions have been routed through such accounts and the cheque returned unpaid were
debited to impersonal account to conceal the fraud and to see whether there is proper follow up
for reconciliation of large outstanding entries in these accounts since there have been instances of
passing unauthorized entries in impersonal accounts for balancing of banks books.
7.
To check/examine any unauthorized opening of LCs and issue of DD/PO without
consideration.
8.
That there is no continuance of staff at the same work seat.
9.
That handling of critical areas of the branch functioning are not single handed since it
facilitates the manipulation of banks books of accounts and concealment of fraudulent
transactions.
10.
To examine large debit/credit entries in newly open accounts and it should arouse
suspicion and alert to verify the genuineness of the transactions with respect to business/
profession of the account holder.
11.
To examine whether heavy cash transactions are being allowed in newly opened
accounts.
12.
To examine movement of banks critical stationery, its stock on hand, indent, custody,
issue, movement loss etc. are proper.
13.
To examine whether adequate safeguard such as fixing of cello tapes and placing of
reverse carbon are adhere to while handling the remittances.
14.
To examine the varicity of exercise of delegated authority of the functionary.
15.
Physical verification of colletral securities charge to the bank during currency of audit.
Further, it would not be out of place to mention here that for the growing tendency in frauds, the
C.A.s are to some extent also responsible sometimes as they certify false stock and financial
statements submitted by the borrowers to the bank and also indulge in wrong reporting about the
affairs of the borrowing company/borrowers, about stock statement, mortgage/pledged to the
bank and diversion of funds to their sister concern on cash and fund flow statements.
67
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
AMRITSAR (URBAN)
AMRITSAR (RURAL)
BAREILLY
BATHINDA
BHOPAL
CHANDIGARH-I
CHANDIGARH-II
CHENNAI
DEHRADUN
FARIDKOT
GURDASPUR
GUWAHATI
HARYANA
HOSHIAR PUR
JALANDHAR
KOLKATA
LUCKNOW
LUDHIANA
MUMBAI
NEW DELHI-I
NEW DELHI-II
NEW DELHI-III
PATIALA
Address
Telephone Number
1.
DELHI
011-28117530
011-28117531
2.
MUMBAI
022-23638682
3.
CHANDIGARH
0172-2722595
0172-5089784
4.
KOLKATA
033-22435281
5.
LUCKNOW
68
0522-2625626