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Credit Transfer Audit

Working File



Elaborated by: Cicanci Cristina
Group:AFB-131m



Legal Basis:
Regulation on credit transfer, approved by the Decision of the
Council of Administration of the National Bank Moldova no.373
of December 15, 2005, Official Monitor of the Republic of
Moldova no.176-181/643 of December 30, 2005;

Regulation on automated interbank payments system, approved
by the Decision of the Council of Administration of the National
Bank of Moldova no.53 of March 2, 2006, Official Monitor of
the Republic of Moldova no.39-42/144 of March 10, 2006;

The Law Nr.548-XIII regarding the National Bank of Moldova,
21 July 1995. Chapter I:General provisions Art.5. Basic
functions; Art.11. Normative acts;

The law on financial institutions Nr. 550-XIII from 21.07.1995;




The Law on currency regulation Nr.62-XVI from 21 march 2008;

The Law regarding the prevention and combat of money
laundering and terrorism financing in the context of credit transfer
Nr.633-XV from 15.11.2001;

The enforcement code of the Republic of Moldova nr.443 from
24.12.2004;

Regulation on suspension of operations, seizing and the
controversial perception of funds in bank accounts;

Accounting chart of accounts;

The internal guidelines of the commercial bank: politics,
regulations, instructions, procedures and nomenclature of
analytical and syntetical accounts.


Audit Objectives:
Identifying the subjects of credit transfer operations;

Verifying the compliance of issuing and submission of payment
order with the legislation in force;

Accomplishment of credit transfer. The receipt of payment order
by the beneficiary bank through the Automated Interbank
Payment System(AIPS);

Determination of issuing credit transfer procedure on the basis of
the Incaso order;

The detection of suspicious transactions, although the factors
that lead to a reduced performance of credit transfer operations.

Control Methods:
Verification of the observance of the procedure for the
identification of clients;
Signature authenticity analysis;
Verification of the compliance of transactions with the legal
norm;
Checking the correctness of filling in payment orders accepted;
Correct accounting within the operations of the credit transfer;
Verification of the correctness of the payment of commissions
for operations;
Detection of the uncompleted transactions and determination of
the reasons for refund, monitoring the process of correction;
Control of credit transfer transactions in foreign currency;


Control of transfer credit operations carried out by persons
monitored by the Law regarding the prevention and combat of
money laundering and terrorism financing in the context of credit
transfer;
The supervision of AIPS is organized in two levels. The first level
is performed by the participants, and the second by the NBM;
AIPS participant supervise the activity of the personnel
responsible for the administration and operation of the software
and hardware means of interaction with the AIPS, as well as the
personnel responsible for managing liquidity risk;
On the Incaso order are applied the signature and the banks
footprint stamp that serves the issuer;
The Incaso order is accompanied by the original enforcement
document on which basis was drafted.
Legal limits:
3.3. The payment order used upon performance of credit transfer
both in national currency and foreign currency, shall contain the
mandatory elements specified in Attachment 4 and5;

3.6. The payment order shall be issued in the state language. Upon
issuing the payment order for national and international credit
transfer in foreign currency, the information used within
international payments systems shall be filled in a foreign language,
according to the international practice. No corrections /erasures shall
be admitted in the payment order.

3.8. The payment order on paper shall be presented to the paying
bank in the number of copies required by the parties.

4.5. The paying bank shall accept and execute the payment order
related to urgent transfer in accordance with the conditions
established and disclosed in advance to the payer. These conditions
shall include at least the time limit in which the payment order will
be accepted and executed by the bank after its receipt from the
client (the time needed for verification, authorization, writing off
and its transmission to the beneficiary bank through the AIPS or to
the beneficiary through the bank's internal system).


The Incaso order must be presented no later by one working day
after the date of issue either in two or three copies;

The Incaso order is drawn on the open account in national or
foreign currency, depending on the account and currency
indicated in the document state;

The Incaso order shall contain all mandatory elements specified
in Annex 3 of Regulation on suspension of operations, seizing
and the controversial perception of funds in bank accounts;

I ssues requiring special attention:
Is complying with the procedure of customer identification at each
presentation?
The signatures on the payment order are confronting with the
bank specimens?
Are correctly rendered credit transfer transactions?
The accepted payment orders are correctly done according to the
requirements of NBM?
Are respected the NBM requirements and those of the internal
execution of the order for payment?
On the basis of which documents is charging the transfer of funds
from clients bank accounts?
The transfer procedure on the basis of Incaso order is complying?




The received Incaso order is recorded in the register of
evidence?
It is enrolled on the reverse side of the document in case of
partial execution of the Incaso order?
Are registered correctly credit transfer operations in
accounting?
It is correct collected the amount of commission for transfer?
There are returned the amount from automated interbank
payments system? What is the cause of returned? Who and
when it will be the correct operation?
Are verifying the purpose and the documents certifying the
transfer of amounts in foreign currency?
Are reported the movements of the persons account being
monitored?



Examination Procedures:
Check if it complies with the procedure for identifying the
customer presentation, including the signature of specimen bank;
Verify the correctness of the operations of the credit transfer;
Determine and check if it complies with the term of execution of
payment orders;
Check on the basis of which documents the transfer of funds is
done from bank clients accounts;
Check if it is respected the transfer procedure according to the
Incaso order;
Check if all the required marks are applied on the reverse side of
the document in case of partial execution of the Incaso order;
Examine if the participant has opened an account in the NBM
book-keeping system in accordance with the legislative and
normative acts in effect of AIPS;
Participating licensed bank shall cease its activity in AIPS on the day of:
a) revocation of bank licence of financial activity in accordance with the
provisions of the Law on Financial Institutions no.550-XIII of July 21;
b) termination of the Contract on participation in AIPS in other cases t
han that mentioned above.
Check if incoming orders are registered in the register;
Check if it is registered correctly credit transfer operations in
accounting;
Check the correctness of the payment of commissions for credit
transfers;
Determine the causes return of amounts reimbursed. Check the
correction procedure;
Determine if there are documents certifying the transfer of the
amounts in national and foreign currency. Determine if these operations
are allowed by the legislation;
The audit results:
Identification. Identify whether or not the subjects credit transfer
operations according to customer identification policy;

Legality. It is matched or not credit transfer operations and the
procedure of provision of these legal requirements;

Correctness. It is executed correctly or not credit transfer
operations based on the documents received for execution and
commissions receivable;

The correctness of the payment accounts. It is registered well
or not in accounting terms credit transfer operations;


Compliance. Corresponds to the bank's activity, whether or not
the legal framework according to the execution code and
regulation on the suspension of the activity and charging in
undeniably;

Detection. Whether or not are returned operations, executed
without confirmative documents by persons being monitored, it
is reported by executors or not.