Annexure – 5
PENALTY CLAUSES
i. Penalty Clauses:
SN Coverage Scope of work Quantum of Penalty to be
Area expected from Measurement imposed (For
Service Provider /CA Service Provider /
Firm CA Firm)
1. Attendance at Attending branch/unit Days of Absence in Twice the
the Work Area. on daily basis, by a month in proportionate
Representative of the attending the remuneration of the
Service Provider / CA branch/unit. month on a pro-
Firm, and 2-3 times a rata basis for the
week by the Partner of (i) by the days of absence.
the Firm. representative of
the Service Eg.30 days in a
Provider / Firm or month;
Remuneration of
(ii) by the Partner of Rs.45000/-p.m.
the Firm with an absence of
2days: Penalty to
be charged:
Rs.3000x2=
Rs.6000.
2. Detection of On a day-to-day basis Non-detection/ non- For Non-
Income income leakage, if any reporting / short detection/ non-
Leakage detected, to be recovery of income reporting: 1% of
reported. leakage from the the amount, in the
date it becomes due area of income
within a period of 2 Leakage not
weeks. The penalty detected/ reported.
to be levied is on i.e. (i)
account of Processing Fee (ii)
opportunity loss for Upfront Fee
the Bank.
(iii) BG/LC Comm.
(iv) Locker rent
etc.,
(Overall cap for
both not to exceed
20% of monthly
remuneration).
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Eg. Processing
Fee of Rs. 1 lac. is
identified by an
Auditor other than
CA. after 2 weeks
of its becoming
due. Penalty will be
Rs.1000 for one
instance.
If such instances are
more, then overall
cap of 20% of
remuneration
[Link].9000 (20% of
45000) to be
charged.
3. Detection of Timely detection of Non detection of Rs.250/- per major
Major lacunae major lacunae. major lacunae as lacunae in an
in the conduct enumerated in the account with a
of the account, CRM Value maximum penalty
systems & Statements of of 5% of monthly
procedures WBCAS. remuneration.
etc.,
4. Failure to Detection/ Reporting of Non detection/ not 10% of monthly
comment on Fraud. reporting of Fraud remuneration per
Frauds, which arising on account instance, with a
may cause of failure in cap of 25% of
loss to the implementation of monthly
Bank. systems & remuneration.
procedures and
security lapses.
5. Detailed Detailed Scrutiny of Detailed scrutiny of Rs.250/ per
Scrutiny of Accounts within a accounts by account with an
Accounts and reasonable time and commenting as per overall cap of 5% of
submission of submission of Value Statements the monthly
observations. observations online on mentioned in remuneration.
a daily basis. WBCAS, if not
done:
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Eg. All accounts
within 3 months and
thereafter once, at
the time of renewal/
review/ new
sanction;
6. Submission of Monthly Reports to be Non submission as Non-Submission:
Monthly / Qly. submitted within a per schedule. 10% of Audit Fee
Concurrent week of the succeeding p.m.
Audit Reports month to the BM/Head
(Annexure-V, of the Unit. Thereafter, Non submission
VI& VII as with their remarks to by over 3 months:
available in RM/DGM (BO) within Termination of the
SBIeTHIC) to 2nd
week of the Contract giving one
the BM/ Head succeeding month of month’s notice.
of the report. Delayed
Unit/AGM
Submission:
(Audit)/ Rs.250/ per day till
GM(NW) etc. a submission.
(With an overall
cap of 10% of
monthly
remuneration p.m.)
7. Unacceptable Should be done in Identified areas of Termination of
delay in the accordance with the deficiency in Contract, by giving
performance time schedule specified performance: a month’s notice,
of obligations. in the Agreement. as per Service
(i) Partner’s not Level Agreement
attending branch/ (SLA).
unit 2-3 times a
week;
(ii) Non-deputation
of representative
every day;
(iii) Non-submission
of Reports;
(iv) Non-detection
of Income leakage
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in time, resulting in
opportunity loss; &
(v) Non-
detection/reporting
of Frauds.
(vi) Poor Quality of
Reports.
8 Overall Should adhere to the Nodal Officers from If the performance
Performance Bank’s instructions the ZIOs and RFIA of the Concurrent
of the while performing Audit Auditors perform Auditor is rated
Concurrent duties and function in surprise checks by “Average” or
Auditor accordance with the visiting the “Below Average”
Concurrent Audit Concurrent Audit for TWO
Policy and manual. Branches / CPCs / consecutive Half
special outfits once Years, the Contract
in a Half Year and Agreement shall be
verify the reviewed/
performance of reconsidered, and
Concurrent Auditors Contract may also
by selecting some be terminated as
sample Accounts. per the terms and
Based on the conditions in the
reports by the SLA. RBI / IBA /
visiting officials ICAI will also be
I&MA/ZIO will rate advised in this
the CAs. regard.
ii. Penalty Clauses for CCV Audit:
SNo. Deviation Penalty
i. For Not conducting Currency Chest 25% of the professional fee payable for
Verification, inputting the data and one instance, from the total payable
recording observations in WBCAS for one during the month.
week.
ii. For delayed verification of Currency 25% of the professional fee payable for
Chests, inputting the data and recording instance, from the total payable during the
observations in WBCAS beyond two month
working days after the reporting Friday,
iii. If the Concurrent Auditor (CCV) does not his services may be terminated
verify and report consecutively for two immediately.
weeks
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iii. Penalty Clauses for RACCs under Cluster Approach:
The penalty clauses mentioned in 12 (i) are applicable to RACCs, as RACCs are Credit CPCs
on par with RACPC / RASMECC / SMECC. Besides the penalty clauses mentioned in 12 (i),
the RACCS under Cluster Approach are as under:
[Link]. Deviation Penalty
i. If two RACCs are allotted to CA Firm Twice the proportionate remuneration of
under Cluster Approach and not visited the month on a pro-rata basis for the days
at least two days for each RACC in a of absence. Eg. 30 days in a month;
week. remuneration of Rs.50000/- (Rs.45000/- +
Rs.5000/-) with an absence of two days :
Penalty to be charged: Rs. 3333*2 days =
Rs.6666/-
ii. If three RACCs are allotted to CA Firm Twice the proportionate remuneration of
under Cluster Approach and not visited the month on a pro-rata basis for the days
at least one day for each RACC in a of absence. Eg. 30 days in a month;
week. remuneration of Rs.55000/- (Rs.45000/- +
Rs.5000/- +Rs.5000/-) with an absence of
one day : Penalty to be charged: Rs.
3667*1 day = Rs.3667/-
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