Summary of checklist for conducting concurrent bank audit
Posted Date : 11-Jul-2012 , 04:42:02 pm | Posted By CA ISHA MARFATIA Your Rating: NoneAverage : 4.05
For New account
1) Name of the account holder
2) Type of a/c saving/current/time/advance
3) A/c no
4) A copy of verified Identity proof
5) A copy of verified residential address proof
6) Verification of introducer’s signature
7) Whether letter of thanks is send or not to the introducer as well as to new depositor.
8) Signature of authorized signatory obtained
9) Check Certificate of incorporation/MOA/AOA, board resolution, Copy of PAN, power of attorney
10) Cross check no of a/c opening forms with a/c opened in the system
11) Ensure photograph of the a/c holder is obtained and fixed or stapled on the a/c opening form.
Name of the A/c holder
Type of account
Sign of the applicants
Sign & Stamp of Relevant Officer
Details of the introducer
Letter of thanks
Scanning of Photo & Sign on the same day
Fill up KYC Certification
Records/register to be maintained for all cash transaction of the value more than Rs. 10 lacs or
its equivalent in foreign currency.
Records for cash transaction to be maintained for 10 years from the date of cessation of
transaction between bank and customer.
Identification of customer through PAN for Rs.10000 and above transaction
Loan Files checking:
1) Verify rate of interest with rate circulars
2) Compare rate of interest and calculate EMI on calculator
3) Check title of clearance in respect of Housing or any other property loan and whether it is authorized by bank’s approved advocates.
4) Where immovable properties are held as security by way of deposit of title deeds, verify title deeds register to see whether narration is written for additional limits and all formalities complied with.
5) In the case of company, Whether common seal affixed on the relevant document.
6) Check valuation of assets as per govt authorized valuer.
7) For education loan check receipt or fees payment sleep and confirm it with the college/institution
8) Check the person’s other loan and installment amount. If total installment amount is more than 60% of its net income, then loan cannot be issued.
9) Confirm proper insurance coverage for loan asset or mortgaged asset and their renewal.
10)Check ,Are all documents correctly executed in the latest revised prints of
prescribed formats and properly stamped wherever necessary in terms of Stamp
Act as per manual on documentation and as per circulars on the subject
11)Check requirement of Letter of acknowledgement of debt(LAD). If loan
agreement is there then no need to take LAD. If once taken then it is
compulsory to review before 3 years.
12)Ensure maintenance of Insurance register
13)Submission of Tax audit report for all CC a/c
14)Submission of CMA data
15)Check crisil credit rating
16)Submission of monthly Stock statement for C.C. a/c and stock statement
17)Ensure regular quarterly stock audit for C.C
18)Compute loan rate in case of LABOD by adding 1.5% to average rate of
19)Physical verification of loan asset
20)Verify whether credit limits are reviewed or not.
21)Verify whether security documents are held with the bank vis-à-vis
stipulation on the sanctioning documents.
22)Verify whether the advances have been classified as per RBI guidelines.
23)Check whether the letters of credit issued by the branch are within the
delegated power and ensure that they are for genuine trade transactions
24)Check the Bank guarantees issued, whether they have been properly
worded and recorded in the register of the Bank. Whether they have been
promptly renewed on the due date.
25)Ensure proper follow up of overdue bills of exchange.
26)Verify whether the submission of claims to DICGC and ECGC are in
27)Registration of charges with Registrar of Companies and Resolution
passed by appropriate authorities. (By filing Form 8)
28)Withdrawal within limit/ Advance Value (Drawing Power Limit) (D/P)
29)Check Processing fees, stamp duty at the time of sanctioning new
30)Report excess drawing over D.P. (For CC and temporary O.D.)
31)Whether Select Operational Data and Quarterly Information System (now
FRS) Statements in respect of big borrowers have been received
promptly? Whether penal rate of interest@ 1% is being charged for
32)Verify whether the branch has charged lead Bank charges in respect of
advances under consortium norms.
33)Check folio charges
34)Check Penal interest for delayed/non-submission of returns, financial
statement required to be submitted
35)Check Penal interest on advances in respect of lapsed sanction/limit.
36)Check Penal interest on excess over limit.
37)Check Overdue interest on all types of bills, loans and packing credits
for overdue period.
38)Check Commitment fee for unutilized limit is collected as per rules.
39)Check Commission of letter of credit, letter of guarantee and charges for
safe custody etc.
40)Check Standing information charges.
41)Check stop payment charges. (For all accounts)
1) Verifying whether exchange of cash between cashiers is made after making entry in the register.
2) Ensure dual control system for cash safe/counting of bundles.
3) verifying cash scroll and the token book with cashier's summary and Cash Abstract.
4) Verifying whether Cash Remittance in Transit Account is reversed on the same day by debit to a proper head of account designated for it after receipt of proper acknowledgement/receipt where cash is remitted to a branch/Bank.
5) Verifying whether accounting of currency chest transactions and their reporting to RBI is done promptly
6) Ensure cash is retained as per cash retention limit of the branch. Report if the cash is retained in excess of the cash retention limit with the reasons thereof.
7) Verify expense incurred by cash payment involving a sizable amount.
8) Verifying whether keys to Strong Room, Cash Safe, and Almirah for Security Printing Books are in joint custody of the authorized officials?
9) Verifying whether there is any entry outstanding in Cash Remittance in Transit Account for more than 3 days
10)Verifying whether the branch remits all its excess cash to link branch or
11)Verifying whether the branch remits its surplus balance with other banks
regularly to the designated RBI centre
12)Conducting a surprise physical verification of cash in hand , foreign
currencies, and foreign travelers' cheques on any day during the month
13)Verifying whether the receipt and delivery of Security Printing Books are
properly recorded under joint signatures
14)Verifying whether physical verification of the Security Printing Books
and tallying with the balance.
15)Whether surprise verification of cash done by officer other than joint
16)If the branch is independently handling clearing, whether the clearing
account is brought to nil every day, if not, comments to be noted down.
17)Whether safeguards are observed to ensure proper handling and custody
including returned instruments?
18)Whether service charges/incidental charges as prescribed are charged for
the cheques returned in clearing.
19)Whether drawings are allowed against unclear cheques.Whether such
cheques are referred through prescribed register and passed by the
Controlling Officer, if the drawings exceed the prescribed limit whether
these are reported to the Controlling Authority. Examine whether interest
was charged and report such omission for rectification.
20)Verifying entries which remain outstanding for more 2 days and checking
for action taken for their disposal
21)Verifying whether account with the Main Branch is reconciled every
22)Check cheques returned/bills returned register and look into reasons for
return of those instruments.
23)In case of difference in clearing, there is a tendency to book it in an
intermediary suspense account instead of locating the difference.
Examine the day book to verify as to how the difference in clearing has
24)Such instances should be reported to Controlling Office in case the
25)Check whether debits in income account have been permitted by the
competent authorities. Check the transactions of staff members.
26)Study internal inspection/audit reports and ensure that the branch gives
proper compliance thereto.
27)Verifying whether the deduction of tax at source (TDS) from interest
income on Term Deposits is done as per laid down procedure. Or Form
15H/15G received or not.
28)Verifying whether Form No. 60 where the depositor does not have PAN is
held on record and the same are submitted as per laid procedure (For
29)Verify if inoperative accounts ledger and Specimen Signatures are kept
under the custody of Manager/Asst.Manager and access thereto is
controlled. (For deposit accounts)
30)Whether dormant/inoperative accounts are transferred to inoperative
ledger. If not, it should be noted in the register and they should be
transferred. (For deposit accounts)
31)Verify that all transactions relating to inoperative ledgers are allowed
under the written authorization of the Manager.
32)Check Incidental charges and service charges in Saving Bank Account
(including inoperative) having balance below prescribed limit.
33)Check Destruction of old records as per time schedule prescribed.
34)Check Locker rent.
35)30% scrutiny of transactions relating to the payment of pension..
36)Whether the prescribed certificates - Life, Re-employment, Re marriage
etc. obtained, wherever required, in all pension accounts.
37)Physical checking of Govt. and other securities held on behalf of
Investment Department and timely collection of interest thereon and their
Records to be maintained by concurrent auditor:
1) Letter of engagement, undertaking/comment by the firm to the Bank
2) Communication to previous Auditor (NOC)
3) Audit checklist
4) Information regarding branch business, data, nodal officer,status of branch, whether computerized/parallel category of branch, etc.
5) Performance of monthly, quarterly, annual report revenue report
6) Correspondence with the Bank for any matter
Current File/Working paper File:
1) Branch Audit Programme
2) Branch’s statement as on the data of the report on which basis it is prepared
3) Periodic correspondence with the concerned departmental officer
4) Irregularities intimated to the Controlling Officer
5) Discussion of the audit report
6) Particulars of big borrowers, depositors etc
7) Circulars received from head office of the auditee Bank
8) Reporting to branch head in the below format
Initial/Authorization of the Concurrent Auditor
Initial of Bank Official
How irregularity rectified
Date of rectification
Initial/Authorization of the Concurrent Auditor
Initial of Bank Official
Demand Deposit includes
1) Credit balance in overdrafts & Cash Credit accounts
2) Deposits payable at call
3) Overdue deposits
4) Inoperative current accounts
5) Matured term deposits and cash certificates
6) Certificates of deposits, etc
7) The cash credit account would be included if the balance is showing credit balance. The current accounts are also payable on demand. The outstanding telegraphic and mail transfer demand drafts are also to be included under the demand deposit head.
Very Nice & useful information for Bank's concurrent Audit. Isha Pl. send me same copy in MS word format on my E-mail :- firstname.lastname@example.org, Sanjay Mohite, Vadodara (M) 94083 56270. All the Best
My best wishes to ISHA MARFATIA-(CA- Inter ) for providing a very good write up with regards to Summary of check list for conducting banks concurrent audit. It will help CAs are doing concurrent audit. Thanks to Isha Mafatia ( CA-inter ) . I wish he/she will qualify as Chartered Accountant as early as possible with Rank. No matter who read the article or not but he /she deserve appreciation. I als
Isha, First of all, all the very best to you for your result. Hope you would clear with good marks. And thanks for this checklist on the concurrent audit of Banks. I find it very helpful for me. I want this checklist. Can u plz mail this to me. My email id is - email@example.com