INTERNSHIP

Submitted In Partial Fulfilment For The Award Of The Degree Of

Bachelor Of Commerce

By
VIGNESHWARAN.V
Reg. No.: RA2031201040314

Under The Guidance Of

Dr.S.Vijay
Assistant Professor

DEPARTMENT OF COMMERCE
COLLEGE OF SCIENCE AND HUMANITIES
SRM INSTITUTE OF SCIENCE & TECHNOLOGY
VADAPALANI CAMPUS, CHENNAI
JANUARY – 2023
S.NO CONTENT PG.NO

1 ORGANIZATION PROFILE 1

2 INTRODUCTION TO CONCURRENT 2
AUDIT

3 SCOPE OF CONCURRENT AUDIT 3

4 BANK PROFILE 4

5 DAYS WORK IN BANK 4

6 MISSTAKE FINDING IN WORK

 ORGANIZATION PROFILE

M R ARULOLI & ASSOCIATES, firm of charted accountants

established in 1993, in Chennai. The firm specialize in bank audits, tax
planning, and auditing and consultation.
The major and significant and activities and services under taken by
the organization are in the bank audits- concurrent audit, statutory audit,
internal audit, stock audit, tax audit and Revenue audit. In direct taxes-
income tax filling of returns of income tax, TDS, representing clients in
dealing with tax authorities and income tax assessment cases. In relate to
indirect taxes- service tax registration, filling of returns of VAT and service
tax, assessment tax and consultancy in related matters.

The firm has helped the banks in the prevention and timely detection
of lapse/irregularities in very many cases which were continuing for year
together. More particular in concurrent audit we have given early-warning
with reference to potential NPA’s and assisted in rectification of
documentation deficiency.

To points few such instances;

 We assisted the bank in the following the circular on prudential norms

and asset classification and more particularly with reference to SDR
 We have identified the missing cartridges of the security gun owned by
the bank.
 We have pointed out the deficiency of improper documentation on the
basis of worng interpretation of an invalid agreement, unnoticed for over
three years.
 We have detected few locker not entered in the computer system but
physically available and the rent was neither collected nor provided for
more than 2years.
 We have asked the bank to see that “legal amount” instead of courtesy
amounts entered in the RTGS/NEFT documents.
 We have identified under insurance, godown not covered by insurance
and uninsured stocks.
The partners and the articles of the shall at all times preserve and aid in
preserving secrecy with regards to any matter arising in the performance
or in assisting in the performance of any function, directly or indirectly
related to the process and conduct of audit. The partners and the articles
shall not make use of or disclose the contents of audit or any confidential
information about the process of audit unless as required by the law of the
bank.
 INTRODUCTION TO CONCURRENT AUDIT
 Concurrent audit is a systematic and timely examination of financial
transactions on a regular basis to ensure accuracy, authenticity,
compliance with procedures and guidelines.
 It is an constant evaluation of the banking transactions to determine
whether the internal control mechanisms are effectively working and
simultaneously identify areas of improvement to enhance efficiency.
 Concurrent audit system is regarded as part of a bank's early warning
system to ensure timely detection of irregularities and lapses, which also
helps in preventing fraudulent transactions at branches.
 Concurrent audit was in existence in large and exceptionally large bank
branches, it was formally introduced by the Reserve Bank of India vide
its circular of October 1993. This measure of the Reserve Bank of India
(RBI) arose out of the recommendations of the Ghosh Committee on
frauds and Malpractices in Banks.
In its said circular, the banking regulator explained concurrent audit as
being “an examination which is contemporaneous with the occurrence of
transactions or is carried out as near thereto as possible. It attempts to
shorten the interval between a transaction and its examination by an
independent person.”
 A financial entity requires continuous monitoring of transactions. For an
entity like a bank, the review mechanism must be robust and unabating.
Hence the need for a concurrent audit.

Concurrent audit means a parallel examination of the financial

transactions, i.e. examination at the time of the happening of the
transaction. It is part of an early warning system of a bank for ensuring
timely detection of lapses or irregularities.

Concurrent Audit:

As the name itself suggests, it is an audit that takes place at the moment
when transactions take place, that means it is parallelly conducted. Unlike
most audits that are post transactional review, the concurrent audit is as
and when transactions take place. It gives an early warning to ensure
timely detection of irregularities and lapses.

Concurrent Audit Procedure :

The concurrent audit covers all transactions of the bank. Hence to

understand how this audit needs to be conducted, an understanding of the
processes of the banks is imperative. Banking functions are inclusive but
not limited to the following:

1. Acceptance of deposits
2. Loans and advances
3. Cash management
4. Safety Lockers
5. Forex
6. Bill payment
To conduct a concurrent audit, functions of the bank must be
fragmented to transactions, and the necessary checks and balances must
be assigned.
 SCOPE OF CONCURRENT AUDIT
Concurrent auditor is required to the check that: transaction are
properly recorded documented and vouched. Spot rectification of the
irregularities and implementation of system and procedure of the bank.
To perform the job effective and efficiently hr must be aware of the latest
guidelines issued by the bank as well as RBI. He should always to be
well versed with the functioning of different deptts at the branch.

A concurrent auditor should be not site in the judgement/decision taken

by the branch manager or an authorized official of the branch. The
purpose of their presence is the provide a second look at the operation.
The concurrent auditors will have to essentially see whether the
transaction or decision are within the policy parameters of the bank and
RBI. And the they are within the delegated authority and in complince
with the lern and conditions for exercise of such an authority. He has
also to see in case of sanction received from higher authorities that terms
and conditions of each sanctions are duly complied with in very large
branches having different sections dealing with specific activites
concurrent auditor is a mean to the incharge of the branch to ensure that
the different section do function within laid down parameters and
procudures on an ongoing basis. Whenever serious irregularities are
observed theses have to be immediately reported to H.O.

The main role of the concurrent audit is to supplements the effects of the
bank in carrying out simultaneous internal check of the transactions and
other verifications and cpmliance with procedures laid down. The scope
of concurrent audit should be wide enough to cover certain fraud-prone
areas, handing of cash, deposits, advance, safe content of securities,
investments, KYC/PMLA cpmliance, overdue bills, exercise of
discretionary powers, sundry, and suspense accounts, inter branch
reconciliation, clearing difference, tresury functions, credit card business,
DP business, settlement of ATM claims, housekeeping. All internal
guidelines/circulars/important references as well as relevant circulars
issued by the RBI/SEBI and other regular bodies should be referred to by
the concurrent auditors on ongoing basis. The key areas thar are broady
under concurrent audit are illusrtrated as under-
1) All accounting transactions, whether paper-based or generated by the
computer (e.g. All voucher, day books/ audit trails, etc ), transcation
covered by the guidelines relating to antimoney laundering (verifying,
reporting archiving, etc).
2) All operational activities like opening / closing of accounts, large value
transactions, transactions in new accounts, draft issues, remittances /
transferes, lockers / safe deposit transaction etc. TAMILNAD
MERCANTILE BANK LTD inspection Department.
3) Concurrent audit as of now, covers transactions of Rs 2.00 lakhs and above
in value, and 10% selected in random of the remaining cases, speed over all
categorise. Moreover the transaction voucher should be subjected to audit
within a period of one weak of this occurrence.
4) Cash: all transactions like handling of cash by all personnel (receipt,
payment, exchange) denomination-wise recording of transactions, storage /
strong room procedures, overseeing by their supervisors, handling of fake
currency notes, cash shortage or excess cash: cause, deficiencies, system
weaknesses, etc., cash retention limits: their being observed, adequacy etc.,
i.e., general discipline in following the bank’s cash procedures.
5) ATM’s-transactions in ATMs, complaints like non/short payment,

‘cash out-position, verification of working security arrangement, tracking

utilization.
6) Documentation creation of security, mortages, registration of charges
relating to new credit approvels; disbursels, compliance to conveants and
legal audit.
7) Handling of guarantees/ letters of credit etc,
8) Income leakages, as related to collection intrest, commission, exchange,
processing, commetment and inspection charges.
9) Expenses; voucher of all branch bank expenses.
10) Insurance; cover for bank properties also there as related to loan assests.
11) Handling of deposits and advances, their renewals; overdue bills,
clearing differences, their follow-up.
12) Checking and reporting of reconciliation in the outstanding in the Inter-
Branch Inter-Sol Accounts, Bankers’ Cheque Outstandings (BCO), Clearing
Cheque Outstandings (CCO), Suspense Accounts, Sundry Deposit Accounts,
Other Deposits, Subsidy Accounts, Deposit Payments, inoperative Accounts
and other receivable payable accounts. Monitoring of opening of internal
accounts.
13) Ensuring that the Branch gives proper compliance to the Internal
Inspection Audit reports.
14) Verification of Revenue Leakage month wise and reporting the detected
details.
15) Verifying the statements, HO returns and statutory returns submitted by
the Branch as to their adequacy and accuracy.
16) Individual analytical reports on Borrowal accounts having limits of
Rs.1.00 crore and above to be compiled for the half-years ending March and
September and to be submitted along with the monthly Concurrent Audit
Reports of the months of March and September.
17) Inspection of borrowal units / godowns / fixed assets / stocks under
pledge / hypothecation with a limit of Rs. 50.00 Lacs and above to be done
in such manner so that all the accounts are covered at least once in six
months and reports submitted on prescribed formats. The inspection shall
cover maintenance of stock register, insurance register etc.,
18) Adherence to KYC / AML guidelines including monitoring of
transactions in accounts, compliance with Foreign Account Tax Compliance
Act (FATCA) and Common Reporting Standards (CRS), reporting of
CTR/STR, maintenance of records as laid down under KYC/AML norms.
19) Identification, enumeration, categorisation and reporting of NPA
accounts.
20) The Department / Branches which handles DEMAT accounts,
verification of IPO transactions, verification of the relevant procedures being
properly followed in respect of opening of DEMAT accounts as per
Depository norms/rules and verification of periodical share transfers
/settlements as per the laid down systems & procedures.
21) In case of department handling foreign exchange business, the Concurrent
Auditor will place special attention to confirm that all key transactions /
decisions are aligned to the Bank’s policy parameters, that they are within
delegated authority, within risk / cut-loss guidelines, that the front, mid and
back-office functions are that, there are as per laid down procedures and
policies of the Bank and to ensure no FEMA violations.
 TAMILNAD MERCANTILE BANK LTD (TMB)
Inspection Department :

BANK PROFILE
 TAMILNAD MERCANTILE BANK LTD (TMB)
Inspection Department :

Tamilnad mercantile bank limited is a bank headquaters at tuticorin,

Tamil nadu, india. TMB was found in 1921 as the Nadar bank, but
changed its name to Tamilnad mercantile bank in November 1926 to wish
its appeal beyond the badar community. For the financial year 2014-2015,
the bank reporting a net profit of 3790 million the bank currently has 487
full brancers throught India,
TAMILNAD MERCANTILE BANK LTD (TMB)
Inspection Department :

ten regional office and elevant extension counters, six central processing
centres, on service branch, there cunrrency chests and 1014 automated
teller machines (ATM). The bank has been expending its footprint all over
india.

TMB was rated as the fastest growing private sector bank continuously
for the year form 2010 to 2015, if was also rated as the best bank in the
years 2013,2014 and 2015,due to ita robust growth. During the years of
2014 and 2015 it did total business of 449 billion rupees. The bank
planned outlay for the financial year is to reach business worth 550 billion
rupees, add an additional 75 branches, and increase its ATM to 1100. The
bank has won the lokmat BFSI Best private sector bank 2014-2015 award.

TECNOLOGY INITIATIVES

Tamilnad mercantile bank was first private sector bank in india to

introduce computererization for branch-level operations. The bank adopted
modernization as early in the year 1983. Today all 437 branche of bank are
networked using infosys’s “FINACLE” software and have achived 100%
connectivity.

RTGS/NEFT facilities in e-banking have been succesfully implemented.

The bank has also entered into an agreement with M/s, bill desk (india
ideas come). CC avenues indias), SBI e Pay, atom technologies and pay u
india for providing payment gateway services to the internet banking
customers. It was the first old bank to have introduction mobile banking
providing POS machines to their customers.

FOREIGN EXCHANGE

The bank had achvied a turnover of Rs. 19682 crores in foreign

exchange for the year ended march 2015. In terms of forex turnover, TMB
ranks first among the tamil nadu-based private sector bank. With in a
viedw to provied enhanced facilities to the bank customers. The stand its
foreign exchanges department from tuticorin to chennai, and created an
integrated tresury anf foreign exchange operations with adquate
infrastructure to handle trading in government securities, bonds, shares,