INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP

Quarter ending 31st March 2023 Chartered Accountants

RAMASAMY KOTESWARA RAO AND CO LLP

CHARTERED ACCOUNTANTS

THE DISTRICT COOPERATIVE CENTRAL BANK LTD., SRIKAKULAM

BRANCH: DANDIVEEDHI.

INTERNAL AUDIT REPORT FOR THE QUARTER ENDING MARCH 2023

Branch Address: DANDIVEEDHI, SRIKAKULAM-532001

ATMs attached with the Onsite ATM & Mobile ATM

Branch

IAR-1

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

CASH
PHYSICAL VERIFICATION OF CASH
We have physically verified (opening) balance of cash on hand as on 20-04-2023.
Cash on hand as per Cash Scroll - Rs.74,83,113/-
Denomination wise cash details (as per Physical Verification) (Amount in Rs.)74,83,113/-

Denomination Cash
2000x 78 1,56,000
500x 12,576 62,88,000
200x 1,506 3,01,200
100x 3,272 3,27,200
50x 4,381 2,19,050
20x 5,008 1,00,160
10x 2,504 25,040
5x 14 70
Coins
10x 6,418 64,180
5x 438 2,190
2x 8 16
1x 7 7
Rs. In Words: Seventy four lakhs eighty
Rs.74,83,113/
three thousand one hundred and
Total amount -
thirteenrupees only.
Any deviations observed: No deviations.
Confirm whether the cash balance is tallying with the Scroll or not: Yes Tallied
RETENTION LIMIT
Branch cash retention Limit: 4,00,00,000/- (Four Crores only)
Exceeding of Cash Retention Limit: No. Cash retention limit has not exceeded.
MOBILE ATM:

DETAILS DENOMINATION TOTAL

CASSETTE 500 0 0

PURGE 500 28 14,000/-

TOTAL 14,000/-

Rs. In Words: Fourteen thousand rupees only.

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Any deviations observed: Yes, there is a shortage of Rs. 87,500/- noticed and the details
given below:

SL NO AS PER CBS AS PER P.V DIFFERENCE

1 1,01,500 14,000 87,500

Confirm whether the cash balance is tallying with the Scroll or not: Not Tallied and the
details are as above. On Enquiry we were informed that due to technical error CBS not
updated therefore the said difference appeared. But it needs to be corrected immediately.
ONSITE ATM:

DETAILES Denomination TOTAL

CASSETTE 500 464 2,32,000/-

PURGE/ROBOTEC 500 6+11 8,500/-

TOTAL 2,40,500/-

Rs. In Words: Two lakhs forty thousand and five hundred rupees only.
Any deviations observed: No deviations.
Confirm whether the cash balance is tallying with the Scroll or not: Yes Tallied.

Auditor's observations
S.no Particulars

1 Whether the joint custody of cash is maintained.
Mention the designations of the officials holding the
joint custody
2 Whether the cash scroll is signed by both the cash
custodians
Yes, the joint custody of cash is
maintained with Assistant branch
manager & Cashier.
Yes, the cash scroll is maintained &
signed

3 Whether the safe custody keys are maintained by the
joint custodians or not.
4 Whether cash movement register is properly
maintained or not
Whether Cash Remittance register is properly
5
maintained and signed by the authorised signatories
with the remittance time.
6 Whether Branch Manager is conducting Physical Cash
Verification
Yes, the safe custody keys are
maintained by the joint custodians.
Yes, the branch is maintaining cash
movement register & updating
regularly.
Yes, the branch is properly
maintaining cash Remittance
register and signed by the
authorised signatories.
Yes, branch manager is conducting
physical cash verification since she
is one of the joint custodians.

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

7 Whether the ultra-violet/fake note detector is Yes, the ultra-violet/fake note

available at the branch and used by the teller. detector is available at the branch.

8 Whether currency notes are properly sorted and Yes, the currency notes are properly
stored separately? sorted and stored separately.
Whether soiled/ Mutilated note register is Yes separate register is maintained
9
maintained in the branch? in compliance to our audit report.
Whether Cash in Transit is properly Insured & It is informed us in branch that, the
documented insurance for cash in transit is
maintained by Head office. We have
10
verified relating documents for
Cash insurance policy covering all
branches.

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Inter Bank Reconciliation
Whether the branch maintains any accounts with
other banks? Yes, branch is maintaining accounts
1
with IDBI.
If maintains specify the names.

Name of the Bank Balance as per DCCB Balance as per Inter Remarks
Bank

IDBI 25,35,170.33 25,35,165.90 UnReconciled

Remarks: Entries to be passed for Bank Charges debited on 10.03.2023

IAR-3

KYC

1 Whether KYC documents were collected
&Verified with the originals
2 Whether the Verified stamp is affixed and
signed with date and also authorised by
designated officer.
3 Whether KYC terms are compiled in
respect of dormant accounts which are
converted into active accounts and if
request letter has been obtained
Yes, KYC documents are collected and verified with
originals.
Yes but in some of the cases stamp and signature or
signature is missing. It is advised to maintain properly.
Yes, the KYC terms are compiled in respect of dormant
accounts which are converted to active accounts

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DEPOSITS

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Number of New
Particulars Accounts Opened
during Quarter 4
Current Account 1
Savings Account (Individuals) 62
Fixed deposits (FD) 8
Recurring Deposits (RD) 29
Re-investment plan deposits (RIP) 40
Special term deposits (STD) 15

S.no Particulars Auditor's observations

1
Whether the application form is duly filled
2 March’23 only and it is advised to
Whether authorised signatory’s signatures& photo
tagging are scanned and updated in the system
Yes, the application form is duly
filled but not complete in all
aspects. It is advised to fill it
completely.
No. Signature and Photo Tagging
was done at the branchtill 15th
update signature and photo tagging
immediately.

3 Pre closure of fixed deposits verified, required letter Yes, letter is obtained and
has been obtained and signature verified signatures are verified.

4 Whether applicable penalty has been charged as per Yes, penalty has been charged as
bank guidelines for pre-closure of deposits per bank guidelines.
Yes, funding to term deposits is
5 Whether funding of term deposit of Rs.50000 or routed through SB/CA/Operative
above is routed through SB/CA/Operative Account Account
Whether nominee particulars are correctly noted in Yes, the nominee particulars are
6
respect of deposit application form. correctly noted
Ensure that Cash deposits greater than Rs.50000 Yes
7 where PAN no. is not Updated in the system is
supported by form 60/61.
Whether term deposits are repaid by any other Term deposits are repaid by
manner other than by crediting the depositor's crediting depositor’s savings bank
8 savings or current account or alternatively whether account.
account payee cheque or demand draft is issued in
the name of account holder.
Repayment of deposits were made
Are there any instances of repayment of deposits only by crediting depositors
9
(including term deposits) in the form of cash account and there are no instances
payment to depositors of Rs.20000 and above? of cash payment noticed.
Whether Term Deposit issue register is properly Yes, Separate register for issue of
10 maintained or not (check if TDR issued are updated TermDeposit is maintained.
properly)

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Any excess/short payment in interest on deposits No such instances found.

11 mainly in closed accounts

Number of Inoperative accounts as on 31st March There are a total of 366inoperative

12 2023 and Amount in Rupees. accounts as on 31-03-2023
amounting to Rs.3,94,433.72/-

IAR-5

TDS

1 Whether TDS is deducted on interest payable on No such cases

term deposits as per provisions of income tax @ 10%
interest exceeding Rs.40000/50,000/-
 2 Whether TDS remitted to head office regularly? And NA, since no such transactions
quarterly returns filed before the stipulated date or
time.
3 Whether TDS remitted to IT authorities seven days Not applicable
from the end of the month (Applicable to HO)
 4 Whether applicable form 15G/H is obtained from the Yes, applicable form 15G/H is
concerned person and regularly updated to HO. obtained
5 Filing of TDS returns Done at Head office

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GST/SERVICE TAX

S.no Particulars Auditor's observations

1 Whether GST/service tax is being collected as per the Yes, GST is being collected as per
circular issued the circular issued.
2 Whether GST/service tax remitted to head office Yes, GST remitted to HO regularly
regularly? but on first date of subsequent
month. It is advised to transfer on
the ending date of the respective
month.
3 Any other discrepancies noticed No discrepancies found
4 Filing of GST returns Done at Head office

IAR-7

1) Loans sanctioned during the quarter JANUARY 2023 TO MARCH 2023.

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Loans
Type of Advance No’s
Gold Loan 136
CC - SELF HELP GROUPS 2
CC - ST OTHERS - INDIVIDUALS 15
CLEAN OVER DRAFT 8
HOUSE MORTGAGE LN TO IND 2
JAGANANNA THODU 14
JLG TERM LN OTHERS-DIRECT 3
LOAN AGNST DEP 4
FISH ANDHRA TERM LOAN 3
LOAN FOR VACANT SITES 3
HOUSE BUILD REPAIR TO IND 1
PERSONAL LAONS-BANK STAFF 13
MT NON AGRI LN-NON FARM SR 1

ADVANCES: -

1) ST and LT loans

1 Whether all the new loans sanctioned during the Yes

month is within the delegated branch powers

Whether rate of interest is applied correctly and Yes, Rate of interest is applied
whether it is updated in system correctly. correctly and the interest rate
2
updating in CBS system is
completely monitored at HO.
Whether the branch is maintaining any register for No, Branch is not maintaining loan
3
loan applications issued. application register
Branch sanction register is maintained or not (with No, Branch is not maintaining loan
4
letter numbers) sanction register.
Whether Adangal, Form 1B have been collected for Yes, collected.
5
respective loans
Whether are there any Discrepancies found in
6
Collecting Processing Charges No discrepancies found.
Whether the field inspection report (pre sanction
7 unit inspection) has been obtained and are there any Yes, Field inspection report is
discrepancies found (check if updated or not) obtained.
Whether Share Capital has been collected as per Yes, share capital properly
8 applicable guidelines and also verify the refund of collected.
these Share Capital.
Whether Legal Opinion has been obtained Yes
9
10 Whether Sub Register valuation (SRV) has been Yes, SRV is obtained and no
obtained and whether there are any deviations are deviations observed.
observed
Check whether proper mortgage charge has been Yes, proper mortgage has been
11
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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

created by the branch created and documented in the

loan file

If there is any mortgage for loan, whether title deeds No such register is maintained by
12 register is updated the branch

In case of Diary Loans, verify whether No such loans sanctioned during

(a) Proper tagging is done and insurance has been the current quarter.
done
13 (b) Whether branch has obtained purchase
committee report and handy Receipts
(c) Whether the loan has been disbursed as per
sanction terms

In case of Swayam Krushi loans, whether the branch No such loans sanctioned during
has followed the guidelines of the bank to the extent, the current quarter.
14 such as taking possession of security documents or
proper 3rd party guarantee (Govt. Employees) and
proper documentation is done

In case of Vehicle Loans, verify whether No such loans sanctioned during

(a) Whether RC/Temporary Registration and the current quarter.
15 Insurance copy with bank clause has been obtained
(b) Whether Duplicate Keys has been obtained and
kept on record

Whether letter of continuity, individual demand Yes but D.P.Note, Loan Agreement
promissory note, loan agreement, letter of guarantee etc.. were not filled in case of ST-
are collected and duly signed by applicants and Others Loans sanctioned to the
branch officials below listed parties:

1. 205/529110-B.APPAYYA
2. 205/530931-CH.SURYA
16
NARAYANA
3. 205/523185-CH.SRINIVASA
RAO
4. 205/570996-CH.ACHODU
5. 205/637568-G.SATYA RAO
6. 205/655792-J.LAXMI

17 Whether all the terms and conditions specified in the Yes, all the terms & conditions are
sanction order are compiled or not complied

2) LOAN AGAINST JEWELS (GOLD)

We have physically verified (opening) gold bags as on 20-04-2023

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INTERNAL AUDIT REPORT
Quarter ending 31st March 2023
No. of bags as per Gold Register 275
No. of Bags as per CBS 275
No. of Bags as per Physical Verification 275
Excess/Shortage No Excess/ Shortage
Any discrepancies found No Discrepancies found
Identity proof and address proof kept on record
1
Application form duly signed and completed in all
aspects by the applicant, the manager and appraiser
2
Appraisal valuation report obtained and loan
disbursed as per the report (check whether proper
3 valuation has been done by the appraiser in respect
of rate, margin, quality of gold and as per the bank
guidelines
4
Gold control register is maintained in good condition
5
Gold packets verified with gold control register
B class share capital and membership fee is collected
6
before disbursal of loan
Whether the gold packets are available at the branch
7 and the gold is sealed properly with the loan details
in it. (Whether tagging is done or not)
8 Whether the gold loan ornaments register is duly
signed by the designated officer
If there are any renewals during the month, whether
9 the conditions are compiled to the extent of bank
guidelines in vogue
10 Insurance for gold packets
Whether the weight of gold ornaments is same as
the details given on the schedule of gold loan given
to the customer
11
12 Whether all the terms and conditions specified in the
sanction order are compiled or not
Ramasamy Koteswara Rao and Co LLP
Chartered Accountants
Yes, relevant documents were on
record either with the application
or with the Deposit Account
application forms.
On verification we observed that
some application forms were not
duly filled and signed, the details
are given in Annexure-1.
Yes, appraisal valuation report was
obtained and loan disbursed as per
report
Yes, gold control register is
updated.
The gold packets are tallied with
the gold control register
No Tracking in CBS For Report for
loan wise.
Yes, the gold properly sealed and
details of loans are mentioned.
Yes, gold loan register is duly
signed by the designated official.
Yes
Insurance is done by Head office.
During the course of audit, we have
made Weighment of gold packets
on sample basis, and found the
weight of gold ornaments is
matched with the details given on
the schedule of gold loan given to
the customer. The details of
verified gold packets on sample
basis are given below
Yes, all the terms & conditions are
compliedbut KYC is not attached
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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

with most of the gold loan

applications.

Weighment of Gold on Sample Basis

Weighment of Gold (Gross Weight)

Account Loan
Sl Date of Loan
Number Amount As per Gold Loan As per Physical
Schedule (Gm) verification (Gm)

1 23/01/2023 1,30,000 43.080 43.180

2 25/01/2023 55,000 16.200 16.200

3 21/02/2023 1,59,500 44.500 44.500

4 21/02/2023 2,18,500 61.900 61.900

5 06/03/2023 2,00,000 53.900 53.900

6 27/03/2023 2,15,000 56.600 56.600

Observations related to gold loan Applications –Annexure 1

S.no Account no Account name Remarks

1 205/641484 SURAPU SRIDHAR Branch Manager not signed the joint custody.

2 205/673539 J.GOPALA RAO Agricultural Loan sanctioned but no agricultural

supporting attached.

3 205/673584 J.GOPALA RAO Agricultural Loan sanctioned but no agricultural

supporting attached.

4 205/534595 T.SITARAM Cashier not signed Joint Custody.

5 205/534754 T.SITARAM Cashier not signed the joint custody.

6 205/541058 G.SATYAVATHI Cashier not signed the joint custody.

3) STAFF GOLD LOANS:

SL NO A/C NO NAME DATE OF LOAN

1 205/515493
Mr. S V SATYANARAYANA RAO . . 09/01/2023
2 205/520311 Mr. SANAGALA PRASADBABU . . 12/01/2023

3 205/532269 Mr. SANAGALA PRASADBABU . . 21/01/2023

4 205/532815 Mr. CH BASAVALINGAM . CHALLA 21/01/2023

5 205/535544 Mr. SANAGALA PRASADBABU . . 21/01/2023

6 205/536047 JANAPALA ANURADHA . . 23/01/2023

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

7 205/540666 Mrs. SHEK HAJA RAA BEEBI . . 25/01/2023

8 205/540713 SUDHA . POOJA SRI HYNDAVI 25/01/2023

9 205/546668 Mr. CH BASAVALINGAM . CHALLA 30/01/2023

10 205/562329 Mrs. UMA GANGABAI . KSHATRI 06/02/2023

11 205/572983 Mr.JAYARAM . NETINTI 10/02/2023

12 205/583361 Mr. SIMMA VENKATA SATYA . JAGAD 16/02/2023

13 205/590287 Mrs. SANDHYA RANI . DUDI 20/02/2023

14 205/590469 Mrs. SANDHYA RANI . DUDI 20/02/2023

15 205/592274 SUDHA . POOJA SRI HYNDAVI 21/02/2023

16 205/592659 SUDHA . POOJA SRI HYNDAVI 21/02/2023

17 205/594293 SUDHA . POOJA SRI HYNDAVI 21/02/2023

18 205/594099 SUDHA . POOJA SRI HYNDAVI 21/02/2023

19 205/594260 SUDHA . POOJA SRI HYNDAVI 21/02/2023

20 205/594408 Mr.JAYARAM . NETINTI 21/02/2023

21 205/618692 Mrs. ARASAVILLI JAYA . . 03/06/2023

22 205/629921 Mrs. SANDHYA RANI . DUDI 03/09/2023

23 205/631805 Mr. PONNADA RAMA RAO . . 03/10/2023

24 205/658578 Mr. SANAGALA PRASADBABU . . 21/03/2023

25 205/658817 Mr. SANAGALA PRASADBABU . . 21/03/2023

26 205/672478 Mr.Bhanupratap .Killi 28/03/2023

27 205/679950 Mr. S V SATYANARAYANA RAO . . 30/03/2023

4) ADVANCES TO STAFF IN THE BRANCH:

List of Personal Loans sanctioned to Bank Staff during the quarter

SL NO A/C NO NAME PRODUCT-DESCRIPTION

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

1 205/503395 MAJJI . RAMYA CLEAN OVER DRAFT

2 205/503667 ROUTHU YOGESWARI CLEAN OVER DRAFT

3 205/508587 Mr. IPPILI . SEETHARAM PERSONAL LAONS-BANK STAFF

4 205/543260 Mr. Bhanupratap . Killi PERSONAL LAONS-BANK STAFFALS

5 205/547243 Mrs. SANDHYA RANI . DUDI PERSONAL LAONS-BANK STAFF-INR

6 205/549444 Mr. S V SATYANARAYANA RAO PERSONAL LAONS-BANK STAFF-INR

7 205/563821 Mr. SAMPADARAO . CHANDRASEKHAR PERSONAL LAONS-BANK STAFF

8 205/568503 Mr. LADI KRISHNAMURTHY . LOAN AGNST DEP - ST MT LT

9 205/568558 SUDHA . POOJA SRI HYNDAVI LOAN AGNST DEP - ST MT LT

10 205/570497 Mr. KOMMURU MALLESWARARAO . LOAN AGNST DEP - ST MT LT

11 205/590583 Mr. HAMSA . VINAYKUMAR CLEAN OVER DRAFT

12 205/593426 Mrs. SAROJA . NANDIVADA PERSONAL LAONS-BANK STAFF

13 205/608117 GIDUTURI . PADMAJA PERSONAL LAONS-BANK STAFF

14 205/628441 Mr. RAMESH . SILLA PERSONAL LAONS-BANK STAFFR

15 205/639009 Mr. CH BASAVALINGAM . CHALLA PERSONAL LAONS-BANK STAFFALS

16 205/645503 Mr. CHENCHALI KAMESWARRAO HOUSE BUILD REPAIR TO IND

17 205/649552 Mr. LADI KRISHNAMURTHY . PERSONAL LAONS-BANK STAFFALS

18 205/653411 MAJJI . RAMYA PERSONAL LAONS-BANK STAFFALS

19 205/660393 Mr. KOMMURU MALLESWARARAO . PERSONAL LAONS-BANK STAFF-INR

20 205/662437 Mr. IPPILI HEMASUNDAR . CLEAN OVER DRAFT

21 205/663101 Mr. BONILA CHIRANJEEVI . CLEAN OVER DRAFT

22 205/665336 BODDA PRIYANKA CLEAN OVER DRAFT

23 205/674747 TALIYA . BALA SIRISHA CLEAN OVER DRAFT

24 205/680047 Mr. RAMAKRISHNA RAO . GURUGUBILLI CLEAN OVER DRAFT

25 205/678979 JANAPALA ANURADHA PERSONAL LAONS-BANK STAFF

It is observed that Signatures of recommendation, sanctioning Authority are not available for all
the cases except loan sanctioned to

1. N. Saroja
2. K.Bhanu Pratap
3. J.Anuradha

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

It is observed that Signature of Drawing and disbursing officer not available on letter of
undertaking to deduct loan EMI from salary.

It is observed that the recovery of loan EMI is not automated. It is manually deducted from salary
as part of pay roll preparation. It is observed that during the month of March’2023 part of the EMI
only deducted from salary of the respective employee.

It is advised to make it automated deduction by activating standing instruction to avoid delay in

recovery or to comply the recovery schedule mentioned in the sanction letter.

5) LOAN TO SELF HELP GROUPS:

S.no Particulars Auditor's observations

Whether advances have been classified as per
prudential norms prescribed by Yes, advances have been classified
NABARD/RBI.Whether provisioning has been done as per prudential norms prescribed
1 as per prudential norms-check on Quarterly basis by NABARD/RBI
Any discrepancies like short/excess charge of
2 Interest in loans be reported No discrepancies found.
Report on the action initiated in the NPA No such Cases found during the
3 accounts-progress during the quarter quarter
Whether KYC documents were collected &Verified
4 with the originals Yes, Collected.
Whether copies of individual SB accounts have
5 been collected for respective loans Yes
Whether sanctioned loan amount is disbursed to
6 SB accounts through SHG account Yes
Whether all necessary documents prescribed in
7 sanction order are collected or not Yes
Whether all terms and conditions mentioned in
the sanction order are have been complied or not, Yes, all the terms & conditions are
8 Whether any deviations observed. complied, no deviations observed
9 Any others discrepancies noticed NO
Whether all the terms and conditions specified in Yes, all the terms & conditions are
10 the sanction order are compiled or not complied.

6) LOAN TO JOINT LIABILTY GROUPS

S.no Particulars Auditor's observations

1 Whether applications are filled properly and Yes
completely
2 Whether loan agreement and inter-se agreement Yes, executed properly.
has been executed properly
3 Whether Individual demand promissory note is Yes, executed but not signed by
been executed by all the members witness in the case of
1. 205/634192-NAVARUCHI
JLG GROUP

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

2. 205/622541- SRI LALITHA

4 Whether Resolution is collected by the branch or
not
5 Whether KYC documents of all the members are
collected and verified and maintained in the loan
file
6 Whether there are any discrepancies found in
collecting the charges specified in the sanction
order.
7 Whether all the terms and conditions specified in
the sanction order are compiled or not
8 Any other discrepancies noticed
9 Whether all the terms and conditions specified in
the sanction order are compiled or not
JLG
Yes collected
Yes, but verified with originals
stamp is not available on some
documents
No discrepancies are found
Yes, all the terms & conditions are
complied
Acknowledgement to sanction terms
should be obtained on the sanction
letter which is a mandatory aspect.
Yes, all the terms & conditions are
complied

7) HOUSE LOANS, HOUSE BUILDING REPAIR,HOUSE MORTGAGE, LOAN FOR VACANT SITES,

S.no Particulars Auditor's observations

Yes, but Loan Agreement not filled
properly in case of 205/519827-
Whether applications are filled properly and U.SUSEELA KUMARI AND
1 completely 205/645503-CH.KAMESWARA RAO.
Yes, executed but not filled properly
in case of 205/519827-U.SUSEELA
Whether loan agreement and mortgage letter has KUMARI AND 205/645503-
2 been executed properly CH.KAMESWARA RAO.
Yes, executed but not filled properly
in case of 205/519827-U.SUSEELA
Whether Individual demand promissory note is KUMARI AND 205/645503-
3 been executed by all the members CH.KAMESWARA RAO.
Whether engineers’ valuation report, Legal opinion
4 is obtained by the branch or not Yes obtained
Whether KYC documents of all the members are
collected and verified and maintained in the loan
5 file Yes, Collected
Whether there are any discrepancies found in
collecting the charges specified in the sanction
6 order. No discrepancies are found
Whether all the terms and conditions specified in Yes, all the terms & conditions are
7 the sanction order are compiled or not complied
Whether
A) latest EC is submitted to the branch
8 B) charge is created properly Yes.
Whether Field inspection Report along with Photo
9 is obtained and enclosed to the loan documents Yes enclosed
10 Whether the purpose of the loan is mentioned in Yes
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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

the sanction order and whether loans sanctioned by

the concerned officials
Whether all the terms and conditions specified in Yes, all the terms & conditions are
11 the sanction order are compiled or not complied

8) LOANS TO CUSTOM HIRING CENTER (CHC): NO SUCH LOANS DURING THE QUARTER.

9) JAGANANNA THODU LOANS:

1 Whether KYC documents were collected Yes, KYC documents are collected and verified with
&Verified with the originals originals.
2 Whether the Verified stamp is affixed and Yes.
signed with date and also authorised by
designated officer
3 Whether application filled properly and Yes but our observations are given vide Annexure-2.
completely
4 Whether all necessary documents Yes, collected
specified in sanction order are collected
5 Whether all the terms and conditions Yes, all the terms & conditions are complied.
specified in the sanction order are
compiled or not

Observations relating to Jaganannathodu Loans- ANNEXURE-2

S.no Account no Account name Remarks

1 205/597715 K.JYOTHI DP Note not signed by the applicant/witness.

2 205/597409 M.KANCHANA Passport size photo not affixed to the application.

3 205/621194 A.GURAMMA DP Note not signed by the applicant/witness.

4 205/597862 G.NAGAMANI Photograph of the activity of the applicant not

attached with the application.

5 205/541659 R.NIRMALA Photograph of the activity of the applicant not

attached with the application.

6 205/522126 SK.FATHIMA BEGUM Photograph of the activity of the applicant not

attached with the application.

10) LOAN AGAINST DEPOSITS

1 Whether Security in terms of TDs of the
branch are available (Duly discharged)
2 Whether Revenue stamp affixed on the
FDR and duly signed by depositor
3 Whether branch has obtained proper
application cum loan agreement form
from the depositor
4 Whether lien is marked on depository
receipt and in system
5 Period of Loan is less than Maturity Date
6 Whether 15% margin is maintained
Yes, security is available in terms of TDs of the branch
are available
Yes, revenue stamp is affixed and duly signed by
depositor.
Yes, branch has obtained proper application cum loan
agreement form from the depositor.
No
Yes, period of loan is less than maturity date.
Yes. 15% margin is maintained.
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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

7 Rate of Interest properly fed into the CBS Yes

8 Whether all the terms and conditions Yes, all the terms & conditions are complied
specified in the sanction order are
compiled or not

IAR-8

LOCKERS:.

Types of Lockers
S.no Particulars Big Medium Small Total
a) No of lockers in the branch 21 45 0 66
b) No. of lockers occupied 15 37 0 52
c) No. of lockers vacant 06 08 0 14
Arrears of locker rent as on 31st March 2023 Yes. An amount of Rs. 4,130/- due as
D) on 31.03.2023.

S.no Particulars Auditor's observations

Whether locker access register is maintained at the
1
locker room? Whether the person operating the
locker is signing the same
Locker access register is maintained
at the locker room and designated
officials are signing the same
regularily.

IAR-9

INTERNAL HOUSE KEEPING

S.no Particulars Auditor's observations

Whether all the security forms viz blank demand Yes, the security forms are secured
drafts blank pay order, Blank term deposit receipts, at stored place
1
blank cheque books are stored at safe and secure
place
Whether any stock register is maintained in respect Yes, the stock register is maintained
2
of the same
Yes, cheque book issue register is
3 maintained
Whether cheque book issue register is maintained
Voucher management
Yes, all the vouchers are filed and
1 Whether all the vouchers are filed and tagged tagged on daily basis.
(stitched)on daily basis.
Whether the vouchers are authorised and signed On verification we observed that
there are no signature of
2 authorized officials on few
vouchers, the details are given in
Annexure-3.

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Whether proper supporting is enclosed with the Yes, Proper supporting is enclosed
3 vouchers with the vouchers

No over writings were found on the

4 Whether particulars in the vouchers are correctly vouchers in the quarter
recorded without any overwriting
Yes, the denomination particulars
are correctly written in the
5 designated place in vouchers for
In respect of cash deposit whether the denomination cash deposits except for some
particulars are correctly written in the designated vouchers which are given below
place in vouchers
Whether all the vouchers are done by the maker and Yes, all the vouchers are done by
6 verified by the checker or the not with signatures on the maker and verified by the
them checker with signatures on them.
Whether NEFT/RTGS charges are properly collected Yes, Collected as per circulars
7 as per the circular issued by the Head office of the
Bank
Cheque Clearing
Inward/ Outward Registers are
1 Whether Cheque Inward/ Outward Registers maintained at the branch.
maintained and updated at the branch
Separate register is not maintained
2 for cheque returns.
Whether cheque return register is maintained
Since, no such register is
Whether cheque returned has been handed over to maintained at the branch, we are
3
the customer and the signature is taken the unable to verify such signatures
respective register

Observations relating to vouching –Annexure 3.

S.no Date Account no Type of voucher Remarks

1 02/01/2023 705/3409589 Chq-Withdraw Cheque passed with only one signature

where the account requires signatures
of both the joint signatories.

2 08/02/2023 705/4486734 Chq/tfr Designated Official signature and stamp

not available.

3 16/02/2023 705/4466398 Neft - tfr NEFT transaction effected without

obtaining cheque/ debit advice signed
by authorised signatory.

4 09/03/2023 705/4475212 Chq-tfr Designated Official signature and stamp

not available.

5 21/03/2023 705/3407810 Neft - tfr Designated Official Stamp is not

available.

SURPRISE CHECK OF SECURITY ITEMS

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

1 Security Items maintained in safe custody Yes, Security Items maintained in safe
custody.

2 Security Items issued in serial order Yes, Security Items issued in serial
order.
3 Security items physically verified and tallied with security Yes, verified and tallied with security
register register
IAR-10

APPRAISER

S.no Particulars Auditor's observations

 Yes on 18.03.2023 Mr.P.Rama
1 Whether letter of appointment of appraiser is Sankar Rao appointed as appraiser.
available with the branch
Whether appraiser deposit is maintained by the Yes, Deposit is maintained by the
2
branch branch.
 Appraisal charges are to be
Whether branch is collecting appraising charges with collected from the gold loan A/c
3
GST from gold loan A/c & paid to appraiser as per along with GST and to be credited
bank norms through branch’s A/c’s. to appraiser
IAR-11

SUNDRY DEBTORS

All entries in GL which are not cleared within 3 months should be reported:

The branch is advised to clear long pending entries in Sundry Debtors account

SUNDRY CREDITORS

All entries in GL which are not cleared within 3 months should be reported:

The branch is advised to clear long pending entries in Sundry Creditors account

IAR-12

FIXED ASSETS

S.no Particulars Auditor's observations

Fixed assets register is maintained
1
Whether Fixed assets register is maintained at the branch but not updated
Whether Branch Fixed Asset number is mentioned on Branch Fixed Asset number is not
2
the asset mentioned on the asset.
OTHERS

Check whether any customer grievances received at No, customer grievances received
1
the branch at the branch

2 Check whether passbook is issued to customers on Yes, passbook is issued to

request customers on request
T R Books maintained at the branch Yes, TR books are maintained at
4 branch and the TR transactions of
supervisor are as below vide
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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

Annexure-4 and there are no

transactions in TR books
maintained by Branch manager.

TR BOOK TRANSACTIONS OF SUPERVISOR –Annexure-4.

SL.NO DATE TR. NO NAME AMOUNT

1 09/01/2023 5412 SRI SAI JLG 7,500
2 09/01/2023 5413 SRI TEJA JLG 5,400
3 09/01/2023 5414 VIJAYA SRI JLG 6,000
4 09/01/2023 5415 SRI AMARNATH JLG 10,100
5 09/01/2023 5416 B. SUNITHA 5,000
6 23/01/2023 5417 A SRINIVASA RAO 5,000
7 23/01/2023 5418 YELLAMMA JLG 5,000
8 23/01/2023 5419 GOVINDA JLG 5,000
9 22/02/2023 5420 SRI AMARNATH JLG 20,200
10 28/02/2023 5421 YELLAMMA JLG 4,000
11 28/02/2023 5422 B. SUNITHA 8,000
12 16/03/2023 5423 M SURYA RAO 4,000
13 29/03/2023 5424 GURU JLG 5,000
14 29/03/2023 5425 NESTHAMA JLG 10,000
15 29/03/2023 5426 B PRAVEEN 10,000
IAR-13

NPA

S.no Particulars Auditor's observations

1 Whether branch is following IRAC guidelines for identification Yes, branch is following IRAC
of NPA accounts guidelines for identification of NPA
accounts.
2 Report on NPA and Recoveries Branch has to put efforts to reduce
NPA
Internal Auditor Comments and Observations on General Operations of the Branch

1. It is advised to maintain loan application register and title deeds register related to loan at
the branch.
2. It is advised to fill all the columns in the applications completely.
3. It is advised to update the fixed assets register and maintain asset numbering or tagging
system.
4. Verified with originals stamp and branch official’s signatures should be available in all the
KYC documents related loan.
5. There are some observations related to gold loan and vouching which are given in annexures
above.
6. It is advised the bank to fill the all the data mentioned in the application i.e., DP note,
Sanction Order, Nominee details related to gold loan properly and completely.
7. Compliance to previous quarter internal audit observations is not yet submitted.
8. It is very much essential to affix the signatures of the delegated official of the bank on the

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INTERNAL AUDIT REPORT Ramasamy Koteswara Rao and Co LLP
Quarter ending 31st March 2023 Chartered Accountants

space provided on various documents like vouchers, sanction letters and etc..it is observed
that signatures are missing on some documents which needs to be corrected immediately.
9. It is to be noted that witness signatures on important documents like Loan DP Notes, Loan
Agreements, Surety bonds etc. are very important in case of legal disputes. Therefore,
Branch should pay utmost attention towards obtaining Witness Signatures.
10. It is observed that, customers are splitting the gold loans below two lakhs to get the benefit
of lower interest rate and opening more than one loan accounts on same day which leads to
revenue leakage to the Bank and the sanctity of having slabs in interest rate is missing.
11. It is observed (the details given in Annexure-3) that, transactions effected without complying
the most important guidelines of general banking like not obtaining signature of joint
signatory and not obtaining cheque/debit advice for NEFT transaction which should viewed
seriously to prevent fraud / collusion.
Note:-
Regarding verification fact, wherever possible we have done 100% verification and
remaining random verification.
For Ramasamy Koteswara Rao and Co LLP
Chartered Accountants
FRN: 010396S/S200084

B Sooraj
Partner
Membership No.244893

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