1) Kindly check all OD against FDR'S as consequent to change in FDR

rate, OD rate has not been changed by branches and system

automatically in s not changing Rate to be charged on OD which is 1%
above FDR rate. Further, processing fees on non-fund based limits such
as Bank Guarantees and LC are not being charged by branches. Kindly
cross check and effect if there is recovery on these accounts.
2) RBI Master Circular on Gold Loans dated July 22 2014 specifies Gold
Loan tenor not to exceed 12 months but bank in question is extending
EMI based gold loans of a longer duration. Sir Agri gold loans can't
exceed 12 months but personal gold loans can be extended to 3 years
3) We submitted a qualified report as got a parking account being
severely mis utilised for advances mis-classification.so they are yet to
confirm the closure as CSA not accepting such qualification remarks
4) Plz check. In case of gold loan bank are taking signature of gold
returned to borrower on gold loan register or they actually returned gold
5) We noted two issues in our audit
i)Standing instruction failure for loans transfer due to insufficient funds
but branch has not charged any charges for it
ii) MSME standup India term loans branch has not collected inspection
charges
6) Gold as per loan is not matching with vault - what is suggested?
Also stock statement not obtained for few loans which are below 5 lacs -
should it be marked NPA?
7) If classification changes, provision will change and MOC should be
filed
8) EMI = 20K PM
Ist installment paid 0
2nd installment paid 0
3rd installment paid 20k
So account shall be treated as NPA or not since ist installment is
overdue for more than 3 months?
BM said 10k which he has paid in 3rd installment will be adjusted
towards ist installment so no NPA
If a single rs from 1st installment is still left even after this 20k payment
then it would be NPA. bcz an int or principal is overdue for 3 months in
such case
If ist installment paid 10k
2nd installment paid 5k
3rd installment paid 5k

EMI 20K

NPA or not?
No. Payments will be first apportioned towards 1st due.
However there is one angle which can be see, normally penal interest
shall be levied on irregular payments as per Loan agreement if
mentioned and in such case that interest will be overdue. But I am not
sure that a account can be treated as NPA due to non collection of penal
interest in 3 months
In case of DLs against deposits, where tenure has expired but loan/od is
not adjusted, interest rate is static, whereas Deposit rate is increasing
due to auto-renewal. Consequently, advance rate is not much below the
deposit rate.

Apart from MOC for differential interest, do we report it as an EOM para?

Last year I reported this issue to Csa column under lafar :::: that is any
matter you want to report to central statutory auditors
Bank is providing Temporary Overdraft on Salary accounts based on
salary slips and Overdue in Tiny Special OD (Jandhan account).

1. Is it NPA if no credits and outstanding more then 90days?

2. If Yes, then provisioning on this would be 100% in the absence of any
security?
1. Yes 90 days norms are applicable
2. for unsecured portion 100% provision has to be made
8) MOC is to be given for Bank Guarantees expired.If claim period given
in guarantee is also lapsed, you need to reverse the BG.BM can not wait
till they receive the BG. Give MOC of reversal of BG.
9) Check the Gold inward register.. whether gold deposited in Bank by
borrower or not.
If not then it's a window dressing to meet the target by branch.
Leads to fraudulent activities.
10) As per the Gold Outward Register, Gold released without receipt of
loan amount and there is an inward of the same qty and a new loan
account is being created and disbursed and the old loan is cleared by
that fund.
11) Excess cash deposited in bank's ATM is shown as Sundry Deposits
and old entries are reported in LFAR. Has anybody observed that for
each entry they issue Banker's cheque and keep it with themselves in
anticipation that someone would come and claim his/her money. My
concern is that bank is understating sundry deposits and overstating the
banker's cheque balance to escape from the eye of the regulator.
Second my question is you don't know who has deposited excess
money and whose name is bank issuing banker's cheque? Further,
there is 3 months validity of the bankers cheque. For which bank replied
they revalidate the bankers cheque. Has anybody noticed this and what
they have done in this case.
Even if this is accounting policy adopted by the bank it is very wrong. If
there is no such policy it is very serious. Those who have not signed look
into the matter and reply
12) Red Flags
Default in payment to the banks/ sundry debtors and other statutory
bodies, etc., bouncing of the high value cheques.

Raid by Income tax /sales tax/ central excise duty officials.

Frequent change in the scope of the project to be undertaken by the
borrower.

Under insured or over insured inventory.

Invoices devoid of TAN and other details.

Dispute on title of the collateral securities.

Costing of the project which is in wide variance with standard cost of

installation of the project.

Funds coming from other banks to liquidate the outstanding loan

amount.

Foreign bills remaining outstanding for a long time and tendency for bills
to remain overdue.

Onerous clause in issue of BG/LC/standby letters of credit.

In merchanting trade, import leg not revealed to the bank.

Request received from the borrower to postpone the inspection of the

godown for flimsy reasons.

Delay observed in payment of outstanding dues.

Financing the unit far away from the branch.

Claims not acknowledged as debt high.

Frequent invocation of BGs and devolvement of LCs.

Funding of the interest by sanctioning additional facilities.

Same collateral charged to a number of lenders.

Concealment of certain vital documents like master agreement,

insurance coverage.
Floating front / associate companies by investing borrowed money.

Reduction in the stake of promoter / director.

Resignation of the key personnel and frequent changes in the

management.

Substantial increase in unbilled revenue year after year.

Large number of transactions with inter-connected companies and large

outstanding from such companies.

Significant movements in inventory, disproportionately higher than the

growth in turnover.

Significant movements in receivables, disproportionately higher than the

growth in turnover and/or increase in ageing of the receivables.

Disproportionate increase in other current assets.

Significant increase in working capital borrowing as percentage of

turnover.

Critical issues highlighted in the stock audit report.

Increase in Fixed Assets, without corresponding increase in turnover

(when project is implemented).

Increase in borrowings, despite huge cash and cash equivalents in the

borrower’s balance sheet.

Liabilities appearing in ROC search report, not reported by the borrower

in its annual report.

Substantial related party transactions.

Material discrepancies in the annual report.

Significant inconsistencies within the annual report (between various

sections).
Poor disclosure of materially adverse information and no qualification by
the statutory auditors.

Frequent change in accounting period and/or accounting policies.

Frequent request for general purpose loans.

Movement of an account from one bank to another.

Frequent ad hoc sanctions.

Not routing of sales proceeds through bank.

LCs issued for local trade / related party transactions.

High value RTGS payment to unrelated parties.

Heavy cash withdrawal in loan accounts.

Non submission of original bills.

13) Any command for interest calculation for OD CC in finacle? Haintrpt
detail interest report along with rate of interest
14) Car can be hypothecated but if registered in bank's name- who is
responsible for penalties on violations of traffic rules and accident
claims?
Interest freebies may be granted if necessary sanction from controlling
authority is there.
A comment in lfar may be put as the same procedure will be followed in
all other branches. Cumulative effect at HO level will be material
regarding the risk.