Annx-2-Con Audit Policy 2012-13

OBC Concurrent Audit Policy
POLICY GUIDLEINES FOR CONDUCTING CONCURRENT AUDIT

1. INTRODUCTION
The basic objectives of the concurrent audit system is to provide an additional administrative support to the branches to ensure adherence to systems and procedures and for timely detection of lapses, irregularities at the branches, so that necessary remedial measures could be taken without any loss of time. Concurrent Audit is an examination of transactions which is Contemporaneous with the occurrence of the transactions or carried out as near thereto as possible. The purpose of concurrent audit is to supplement the efforts of the Bank in carrying out simultaneous internal check of the transactions and compliance with the laid down systems and procedures of the bank. The emphasis is on substantive checking of the key areas and on spot verification of deficiencies leading to non-recurrence of the same. As of now concurrent audit is available as a tool for the management of the Bank, to have a "cool and hard look at t he way critical branches function and decisions taken and implemented. The system, if properly implemented would improve functioning of the branch, thus, upgrading its rating and also to prevent Frauds.
2.
COVERAGE OF ACTIVITIES
2.1. As the main role of the Concurrent Auditor is to supplement the efforts of the bank in carrying out simultaneous internal check of the transactions, all the daily transactions of the branch have to be checked by concurrent auditors. RBI has indicated that the scope of concurrent auditors is wide enough to cover specifically certain fraud prone areas like. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) Handling of cash Deposits Safe custody of securities, Investments Overdue bill Exercise of discretionary powers Sundry and suspense accounts. Inter branch reconciliation. Clearing differences Foreign exchange business including Nostro accounts Off balance sheet items like letters of credit and guarantees Treasury finance and Credit Card Business
While it has been decided to cover each and every transaction of the branch in concurrent audit, RBI has suggested some items which should be kept in view while compiling the report. 2.2. The emphasis shall be to make more in-depth study and to ensure prompt and regular reporting of the irregularities. There is an emphasis in favour of substantive checking in key areas rather than test checking. Concurrent Audit should cover all the aspects of the branch working with detailed coverage of critical areas like Credit Monitoring, Review of Loan Accounts, instances of cheque returns, compliance of KYC/AML Norms etc. 2.3. The Concurrent Auditors are also required to submit summarized Special Reports in case of any serious irregularities / instances of frauds directly to Head Office. Close monitoring of the accounts to prevent slippages to NPA category / diversion of funds assumes lot of importance in day to day working of the branch and the Concurrent Auditors have significant role to play in this regard. Similarly, instances of purchase / discount of
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accommodation cheques / bills and kite flying transactions and cases of high returning of cheques also need to be detected and reported promptly. 2.4. The reports shall have to be prepared by the Concurrent Auditors meticulously and with critical / crucial observations without missing / omitting any irregularities by them so that no new irregularities shall be detected/ reported in the subsequent Regular Inspection. Similarly, the instances of revenue leakage in branches shall not be overlooked by the Concurrent Auditors, which may subsequently be detected and reported in the regular revenue audit. 2.5. The Bank has in place Know Your Customer (KYC) guidelines which are updated from time to time. It should be ensure that the same are strictly complied with by the branch. It is required that the systems & procedure and guidelines contained in the said circulars are complied with by the branches and the same needs to be checked and verified by the Concurrent Auditor on an on going basis. Monthly certificate on Annexure -11 & Annexure 11 A should form part of your reports and a copy should be sent to GM (I&C), Head Office along with a covering letter. In addition, the verification of the preparation of the Customer Profile / Risk Categorisation of existing accounts at the Branches is also to be taken up by the Concurrent Auditors. Concurrent auditors shall ensure that the branch is maintaining proper record for cash transaction (deposit as well as withdrawals) of Rs.10 lacs and above. Information to be extracted from CBS System on monthly basis & scrutinized for any unusual/ suspicious transactions which shall be reported to RO/ HO. Hard copy of the report duly singed by branch officials shall be kept at the branch for verification by Concurrent auditors/ Inspecting official. 2.6. Information relating to proper asset classification of advances be also checked on monthly basis by the Concurrent Auditors and issue Certificates to this effect on quarterly basis on Annexure -6, besides other operational aspects including Balancing of Books, MIS etc. 2.7. Obtaining balance confirmation in deposit accounts (savings and current accounts) on random basis at periodical intervals: Concurrent auditor shall randomly select 50 accounts every month and arrange to send letters (to be signed by branch manager as per Annexure -7) to the selected borrowers. The replies received in this regard at branch level shall be examined by concurrent auditors and shall refer the matter to respective regional inspectorate in the case of any discrepancy. 2.8. Concurrent audit - Forex Transactions Consequent to enactment of Foreign Exchange Management Act (FEMA) with effect from June 1, 2000, authorised dealers have been delegated more powers for undertaking current account transactions. In terms of sub section (5) of section 10 of FEMA, before undertaking any transaction in foreign exchange on behalf of any person, Authorised Dealer is required to obtain a declaration and such other information from the person on whose behalf the transaction is being undertaken that will reasonably satisfy them that the transaction is not designed to contravene or evade the provisions of the FEMA and/or rules/regulations made or notifications/ directions/orders issued under the Act. RBI has advised that while the internal auditor/inspector/concurrent auditor may continue the verifications of all the forex transactions undertaken by the branch, they may also carry out
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100% checking of form A1 A2 and A3 meant for submission to Reserve Bank of India along with R Returns from the fortnight ending august 15, 2002 onwards. A summary of major deviations /irregularities observed from the above verifications may be put up to the Board of the bank on quarterly basis for necessary action. Internal auditor/ inspector/ concurrent auditors are also be advised to issue a certificate about the bonafide of the forex transactions undertaken by the branch including the correctness of forms A1 A2 and A3 also mentioning that the transactions have been carried out as per the internal guidelines/ instructions issued by the bank vis--vis FEMA provisions. They shall certify that due diligence exercise has been carried out while dealing with the forex transactions. The above certificate may be kept with the branches which should be made available to the inspection officers of Reserve Bank of India for verification. Concurrent auditors shall note the above guidelines and comply with it and certificates as per Annexure -4 should be submitted in time. 2.9 Coverage of Branches/ Business The following types of branches/offices shall be covered under concurrent audit: Normal branches 1. Exceptionally Very Large (Scale-VI), 2. Exceptionally Large (Scale-V), 3. Very Large branches (Scale IV) 4. Any other branch where concurrent audit is considered desirable by the Bank. 1. Overseas 2. SSI/ SME, Large Corporate & Mid Corporate 3. Authorized Branches handling foreign exchange business 1. Very High & 2. Exceptionally High Risk branches
Specialized branches Branches as per Risk Rating in RBIA Departments of HO/ Offices/ Cells
1. Integrated Treasury & Dealing Room 2. Fund Management department handling Investment portfolio 3. Reconciliation Deptt. 4. Depository Service Cell at Mumbai or at any other place. 5. Any other department/ office where concurrent audit is considered desirable by the Bank.
3.
TERMS & CONDITIONS FOR APPOINTMENT AS CONCURRENT AUDITOR Eligibility of CA Firms The eligibility criteria of CA firms as provided in existing policy is as under and no change is proposed: Constitution of Partnership Firm Firm No. of Partners Minimum Three partners (All F.C.A.) However, at centers where suitable firms are not available, Audit Firms with lesser number of partners FCA/ ACA may also be considered for appointment. Establishment At least 5 years old Bank Audit At least three years Bank Experience (Inspection/ Concurrent Audit/ Experience Statutory Audit/ Revenue Audit) Audit Team One representative and/or partner of the CA firm should come to the branch daily and mark his attendance in the Attendance Register at the branch. However, the partner of the firm must attend the branch atleast for 10 working days in a month and should also mark his attendance in
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Attendance Register. The office/ branch of the firm should preferably be locally situated. However, in case of nonavailability of suitable firm at the local center, the audit firm from nearby city may be identified. The Executive Director will be the competent authority to include/ exclude any branch from eligible branches or to relax eligibility norms of CA firms where compliance of eligibility norms is not possible. Fee Structure The fee structure is given hereunder: Category of Branch & Fee Structure Total Business (Deposit + Advances) at branch Up to Rs. 200.00 crore Over Rs. 200.00 crore and up to Rs. 500 crore Over Rs. 500.00 crore & up to Rs. 1000 crores Over Rs 1000 crores & above For Investment Portfolio at CAO (Domestic Treasury) For Service Branch Full Time For Forex Treasury & Dealing Room Full Time For Reconciliation & Draft Accounts Cell Full Time Mumbai Depository Service Deptt. COPEC Secunderabad
# 1 2 3 4 5 6 7 8 9 10
Monthly Fee (Rs) 14,000 16,000 20,000 25,000 12,000 10,000 12,500 8,000 25,000 25,000
The bank shall pay the service tax, as applicable in addition to the fee. This consolidated fee is for audit, certification, etc. as per policy & guidelines of the Bank. Allotment of Audit Works An audit firm will be allotted only one branch for concurrent audit and the same firm will not be assigned any other work like stock audit/ revenue audit/ IS audit etc. during the term of concurrent audit as before. The firm of Concurrent Auditors, which are having one or more common partners, in the panel of the firms with the bank, shall not be allotted more than one branch, at a time and the same term shall also apply during the cooling period. Term of Allotment & Performance Review The allotment of concurrent audit of a branch shall normally be initially for one year. The term allotment may be extended for a further period of one year subject to satisfactory performance of the auditors. The performance may be reviewed after one year. The assessment will be made at Regional Inspectorate levels, on the basis of quality of report submitted to them. They shall submit the performance appraisal of the concurrent auditor to the General Manager (I&C), H.O. on the format prescribed by the Head office for the purpose. The bank shall always have the right to cancel the allotment, at any time, during the currency of concurrent audit. The review of the concurrent auditor may be taken up earlier than one year, if any major irregularities have been observed during RBIA, visits by RO/HO officials or because of any other reason, which bank may deem fit, covering the following parameters:1. Exercise of Discretionary Powers by the Branch Manager. 2. Reporting of Revenue leakage detected by Revenue Auditors and Inspecting Officials of Rs. 1.00 lac and above but not reported by concurrent auditor. 3. Irregularities pointed out in the Regular Inspection but not reported by the Concurrent Auditors. 4. Checking of Securities charged to the bank and Security Papers.
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5. Implementation of KYC norms / Anti Money Laundering. 6. Daily attendance of CA / Assistant in the branch. 7. Inter branch reconciliation. 8. Account with comments on Pre / Post sanction of advances. 9. Whether expenses incurred at the branch carry proper authority. 10. Timely submission of Concurrent Audit report and other requisite Certificates relating to Foreign Exchange, NPA etc. 11. Contribution of Concurrent Auditors in rectification of irregularities pointed out in the Regular Audit/ Inspection, Statutory Audit and Monitoring Officer report. 12. Comments on Customer Service and redressal of Customer Grievances. 13. Any adverse features / lapses / irregularities at the branch indicated by the other Inspecting authorities which were not detected & reported by the Concurrent Auditor. Competent Authority The Executive Director will continue to be the competent authority to add/ delete branches for concurrent audit and for appointment/ cancellation of a firm as concurrent auditor and for reporting to RBI and ICAI, if any serious act of omission or commissions is noticed in the working of the CA firms. Cooling Period The firm after completion of two years shall be placed under cooling period for at least one year, the bank may consider allotment of other audits/ assignments, during the cooling period. However, during the term of concurrent audit, the Bank shall not allot the firm any other assignment. Accountability of Concurrent Auditors If during the concurrent audit any serious acts of omissions or commissions are noticed in their working their appointments may be cancelled and the fact may be reported to RBI and ICAI by the competent authority. Attendance Register One representative and/or partner of the CA firm should come to the branch daily and mark his attendance. However, the partner of the firm must attend the branch atleast for 10 working days in a month and mark his attendance in Attendance Register. For monitoring the attendance, the concerned branch shall maintain a daily Attendance Register exclusively for the Concurrent Auditors and representatives of the audit firm must sign the attendance register daily in token of their attending the branch and the attendance register would be taken by the branch incumbent during RIAC meeting. Providing of Proper Infrastructure to Concurrent Auditors For updating the concurrent auditors about the Banks policies, systems and procedures, following action may be taken: 1. Initial and periodical familiarization process for concurrent auditors wherever requested by CA firms 2. All relevant internal guidelines for Concurrent Audit would be provided. 3. Further, concurrent auditors may be given training on CBS relating to generation of reports and other related audit functions if so requested by CA firms. Monitoring of Concurrent Audit Reports /RIAC Meetings The Heads of Regional Inspectorates in consultation with the Regional Heads will call the quarterly meetings of concurrent auditors to discuss their quarterly reports and also to review the progress made in closure of previous reports. It shall be ensured by the RO/ RI Head that RIAC meeting is attending by a partner of the CA firm and the partner may be assisted by his representative attending to branch audit.
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Reimbursement of TA/ DA to Concurrent Auditors for RIAC meeting As provided in the existing policy, "To and Fro" fare from the center/ city of branch to place of meeting (place, other than center/city of branch) equivalent to First Class/ 2 nd AC Train/ Taxi charges, whichever is less, will be permitted for one partner attending the meeting, on production of necessary proof of expenses. The return fare would also be payable to outstation concurrent auditors attending meeting whenever called. The Regional Head is the competent authority to pass the TA bill. Competent Authority for Passing the Auditors Bills The Regional Head would continue to be competent authority for permitting branch to make payment of the monthly fee bills submitted by the concurrent auditors through concerned branch. However, before permitting payment of monthly fee, it should be ensured that the report has been received and the same is in accordance with the Banks policy/ guidelines on concurrent audit. In case the same is not in conformity with the laid down guidelines, a letter be sent to the concerned concurrent auditor, seeking reply, on the lapses within a period of 15 days. The copies of the letters sent to the auditor and the reply, so received from them, shall be sent to the Incharge of Regional Inspectorate and to The General Manager (I&C) Head office New Delhi. Submission of Concurrent Audit Report & its Compliance As per the Banks guidelines to the concurrent audit, auditors will record the irregularities/ shortcomings noticed during the day in a register on daily basis. The carbon may be kept for making two duplicate copies, one copy to be handed over to Branch Manager/ Hall Incharge against signature to ensure timely rectifications and auditor will mark off these entries jointly with BM. The irregularities rectified will not find place in subsequent reports. PERFORMA OF REGISTER # Irregularities Signature Observed Auditor
Of How Rectified
Date Of Signature Of Rectification CA BM
Monthly Reporting The monthly report shall be cumulative un-rectified irregularities as at the end of the month. Concurrent auditor shall submit the report within 7 days of succeeding month on the prescribed reporting formats & Annexures. One copy will be submitted to branch and 2 nd copy to Regional Office for follow up. Quarterly Reporting List of aggregate un-rectified irregularities and other details on prescribed formats/ annexures of the quarter will be submitted within 7 days of succeeding month of end of quarter. One copy each shall be submitted to Branch, Regional Office and Regional Inspectorate. Dropping of Irregularities The power to drop the irregularities after rectification will be with the Concurrent Auditor till the quarterly report is sent to the Regional Office/ Regional Inspectorate. Once the Quarterly report reached the Regional Office, the powers of dropping irregularities, on rectification will be with the Regional Head. Fraudulent Acts Whenever fraudulent transaction is detected the concurrent auditor shall immediately report the matter to Regional Office, Regional Inspectorate & Inspection & Control department at Head Office as well as to Branch Manager concerned (unless the branch manager is involved). Classification of Assets RBI vide its letter no DBS: ARS: No BC: 17/08.91.001/2002-03 dated 05.06.2003 has directed that all branches under concurrent audit w.e.f June 2003 should get all borrowal accounts
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reviewed from the concurrent auditors, who will also submit certificate as per format given below on quarterly basis: We certify that branch Office _________________ 1. Has complied with income Recognition and Assets classification norms laid down by the Reserve Bank of India, Classification of NPA of the branch are as under: Account As on last date of present QTR As on Last date of previous DD /MM/ YYYY QTR DD /MM/ YYYY Sub Standard Doubtful Loss Total NPA 2. All necessary Income and Expenditure vouchers have been passed for the Quarter Ended Mar / June/ Sept. / December ---- (Year) The above certificates are to be sent to: 1. 2. 3. Recovery & Law Dept. Head Office New Delhi Concerned Regional Office Concerned Regional Inspectorate
3. Certificate of (a) 100% verification of Exchange Control copies of Bills of Entry etc., (b) 100% verification of Export Credits (Pre/ Post shipment against orders), (c) 100% checking of Forms A1, A-2 & A-3 and compliance of FEMA guidelines & (d) any other certification required by the Bank from time to time. (Detailed terms and conditions for appointment as concurrent auditors is given in the Annexure. Acceptance to be furnished on the letter head of the firm duly signed to I&C dept. HO) 1. The audit team shall visit the branch ON DAILY BASIS. The Audit Team shall at least consist of one or qualified Chartered Accountant/Article associate of the firm. However the partner of the firm dealing with bank audit must attend the branch at least for 15 days in a month. 2. The entire working of the branch shall be covered under audit. The shortcomings observed in the working of the branch shall be reported to the Branch Manager in the form of short notes on daily basis as per prescribed guidelines for necessary rectification. Concurrent auditors emphasis should be on the rectification of the irregularities and not on reporting the same in the monthly reports. Only the unrectified irregularities are to be reported in the monthly/ quarterly reports as per procedure given in the Operating Guidelines. 3. The entire loaning documents for the advances sanctioned after the Base Date of the Last Regular inspection of the Branch and thereafter all fresh advances sanctioned during the month shall be examined by concurrent auditors and any irregularity / discrepancy observed in the same should be got rectified by following up with the branch officials. The unrectified discrepancies are to be reported in the first report submitted by concurrent auditors. 4. A report on Computer Audit shall also be submitted along with the Quarterly reports. 5. The report shall be discussed with the Branch Incumbent or other officer as nominated & certificate in this regard from the Branch Incumbent shall be submitted along with the report.
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6. The procedure for submission of the reports on monthly/ quarterly basis is given. However, it is clarified that 4 copies of the quarterly report are to be prepared and the same are to be sent as under: One copy to the branch. Second copy to the concerned Regional Office. Third copy to the concerned Regional Inspectorate. Forth Copy for concurrent auditors records.
7. The Revenue Leakage detected & recovered during the quarter shall also be compiled in Quadruplicate (4 copies) & sent to Inspection & Control Deptt. H.O. along with a copy to respective Regional Office & Regional Inspectorate, as per format enclosed. 8. If any matter susceptible to be fraud or fraudulent activity or any foul play is detected during course of audit in any transaction, the same shall be reported directly to the General Manager (Insp. & Control) of our bank who is the principal officer to report the same to the Reserve Bank of India as per guidelines. 9. Any deliberate failure on your part shall render yourselves liable for action. Further in case the fraudulent activities are not detected and reported by concurrent auditor which should have been detected during the course of audit the same shall be viewed seriously and the assignment can be terminated by the bank besides taking other punitive action against the concurrent auditor. 10. Serious irregularities warranting immediate attention shall be reported in the form of a summarized SPECIAL REPORT to General Manager (I&C), Head Office with a copy to Regional Head & respective Regional Inspectorate immediately after detection of such irregularities. 11. concurrent auditors Shall Closely monitor the bills portfolio & instances of purchase / discount of accommodation cheques / bills, if any, and kite flying transactions & cases of high returning of cheques shall be detected & reported promptly. A certificate to the effect that branch is not indulging in any kite flying operations shall be submitted in terms of RBI guidelines monthly basis. 12. Concurrent Auditors shall conduct cent-percent verification of Exchange Control Copies of Customs Bills of Entry/Postal wrappers under FEMA guidelines, if the branch is authorized to deal in Foreign Exchange Business, at the end of each half-year viz. June & December. A certificate to this effect indicating the period for which cent-percent verification has been carried out shall be submitted to Deputy Gen. Manager, International Banking Division, within 7 days of completion of the half year to which it relates. Copy of the said certificate shall also be submitted to REGIONAL OFFICE alongwith the details of the irregularities/ discrepancies observed, if any. 13. Concurrent Auditors shall conduct cent percent verification of Export Credit (Preshipment/ Post-shipment against orders) to ensure that E.C.G.C. coverage has been obtained in respect of each account. A certificate in this regard shall be submitted to General Manager (IBD), on quarterly basis (for the quarters ending Dec/ Mar/ June/ Sep), under copy to the Regional Inspectorate & Regional Office on the following format:
Month
Amount of Premium paid to ECGC
Date of Remittance to ECGC
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14. Where E.C.G.C. coverage has not been obtained, a separate list of such accounts alongwith details of credit facilities sanctioned and outstanding at the end of the quarter shall be intimated. 15. Concurrent Auditors shall physically verify the various Govt. & other securities kept in the safe custody of the branch (wherever kept) on quarterly basis (for quarters ending Dec /Mar /June /Sep) and certificate to this effect shall be submitted to General Manager (Accounts), within 7 days of close of relevant quarter. 16. Concurrent Auditors shall verify the correctness of the Quarterly NPA Statement prepared by the Branch and send a certificate as per format enclosed to Regional Office, Recovery & Law Department-HO and Accounts Department-HO 17. Concurrent Auditors shall certify the following quarterly statements for the quarters ending Mar/Jun/Sep/Dec at the Branch: Profit & Loss Statement. Statement showing details of Advances for Capital Adequacy (formatREC/OSS/RBI/DSB/2-B/118 ) Statement of Contingent Liabilities (Format REC/OSS/RBI/DSB/2-A/117 ) Provision Sheet for Doubtful debts/Sub-standard debts/Loss Debts. 18. As per H.O. Guidelines monthly report of all Cash Transactions of Rs. 10.00 Lacs & Above in aggregate (deposits & withdrawals) is to be submitted to FIU-IND by the head office of the bank. This statement is drawn from the CBS system now and submitted by head office. However it is the responsibility of branch and concurrent auditor to scrutinize these transactions for identifying doubtful transactions and report them as suspicious transactions to the regional office for onward submission to GM (I&C), Head Office. This information is now available for branches on Netcast and branches are advised to take printouts on monthly basis and scrutinize the same and keep it on record. Concurrent auditor shall ensure that the scrutiny is being done on regular basis and identified suspicious transactions are reported to regional office and report compliance of the same in the monthly audit report. 19. Concurrent Auditors have to conduct 100% verification of all the Forms A1,A2 and A3 and submit the quarterly certificate to the respective Regional Inspectorate as per annexure-1 to 4. 20. The appointment is for one year which may be extended by one more year subject to satisfactory performance of the auditor. The performance may be first reviewed after completion of first quarter of audit. The assessment shall be made at Regional Inspectorate, on the basis of quality of report submitted by the auditor. Performance appraisal on concurrent auditors performance will be submitted to I&C, HO as per the prescribed format. The bank shall always have the right to cancel the allotment, at any time during the currency of concurrent audit. Banks decision in the matter shall be final. 21. The allotment is also liable to be cancelled if any major irregularities have been observed during regular inspection or because of any other reason, which bank may deem fit, covering the following parameters: (a) (b) (c) Exercise discretionary power by the branch manager Reporting of revenue leakage detected by revenue auditor and inspecting officials of Rs. 1.00 lac and above but not reported by concurrent auditor Irregularities pointed out in the risk based internal audit but not reported by concurrent auditor
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(d) (e) (f) (g) (h) (i) (j)
Checking of securities charged to the bank and security papers Implementation of KYC norms /Anti Money Laundering Daily attendance of CA/Assistant in the branch Inter-branch reconciliation Account with comment on pre/post sanction of advances Whether expenses incurred at the branch carry proper authority Timely submission of concurrent audit reports and other requisite certificates relating to foreign exchange, NPA etc (k) Contribution of concurrent auditor in rectification of irregularities pointed out in RBIA, statutory audit, annual financial inspection by RBI, M O Report. (l) Comments on customer service and redressal of customer grievances (m) Any adverse features/lapses/ irregularities at the branch indicated by the other inspecting authorities which were not detected & reported by the concurrent auditor. 22. The concurrent auditor (partner) shall attend quarterly Regional Inspectorate Audit Committee (RIAC) meeting to discuss their quarterly reports and outstanding discrepancies of previous reports if any. ATTENDANCE REGISTER Attendance Register shall be maintained by the branch for recording attendance of partner/ representative of CA firm. One representative and/or partner of the CA firm should come to the branch daily and mark his attendance. However, the partner of the firm must attend the branch atleast for 10 days a month and mark his attendance. DECLARATION OF FIDELITY & SECRECY BY C.A. FIRM A declaration as per proforma should be furnished by Concurrent Auditors immediately on appointment and before starting the audit work. This declaration duly signed shall be sent to I&C Dept., HO along with acceptance letter of terms & conditions of appointment as per proforma mentioned earlier. 5 REPORTING: 5.1. DAILY
The irregularities/shortcomings noticed during the day will be recorded in a register on daily basis as short notes (specimen provided). The carbon may be kept for making two duplicate copy and one copy of this notes will be given to the Branch Manager/Second man /hall In charge against his signatures every day, the branch will rectify these irregularities/shortcomings on daily basis and on satisfaction concurrent auditor will mark off these jointly with the branch manager. The irregularities marked off will not find place in subsequent reports PROFORMA OF REGISTER Date Irregularities Observed Auditors Signatures How irregularity Rectified Date of rectification Auditors Signatures Incumbents Signature
Recording of these irregularities may be done in the form of appendix A, B, C in sequential manner as prescribed in regular inspection. Regional Head/ Chief Manager/ Asst. Regional manager or any other officer authorized for this purpose visiting the branch will examine the register to ensure that the audit is being done on day to day basis, rectification of Irregularities is properly being attended to and all systems and procedure are being followed properly. The performance of Branch Manager/ Concurrent Auditors shall inter-alia be on the basis of on the spot rectification of irregularities. This will
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develop the culture of on the Spot rectification and prevention of recurrence of irregularities 5.2. MONTHLY a) The monthly report will be cumulative un-rectified irregularities as at the end of the month including irregularities observed in computerized working of the branch wherever applicable. The Monthly Reporting will be done on the prescribed monthly report format/ annexures. The Monthly report/ annexures should be submitted to the concerned Branch, Regional Office with all the annexures within in seven days of succeeding month. b) The discrepancies pointed out in the loan documents in the previous Inspection report still not rectified along with comments of the Branch Manager will be sent by the Concurrent auditor. In case there is any gap between the last inspection and the present inspection all the transactions of this period will also be covered by the concurrent auditor and discrepancies in all the areas of the branch functioning including loans with special emphasis on documentation, compliance of terms and conditions of sanction will also be mentioned in the report. The areas like export credit and ECGC Coverage, checking of exchange control copies, of customs bill of entry /postal wrappers, checking of Govt: and other securities will also be covered. 5.3. QUARTERLY
List all un-rectified irregularities of the quarter will be reported. The quarterly report/ annexures as per format will be submitted to the concerned branch, Regional Office & Regional Inspectorate within seven days of succeeding month. Revenue Leakage The report on revenue leakage detected, recovered and un-recovered will be part of the report. Report of revenue leakage detected and recovered during the period of inspection will be given. All reports, monthly and quarterly will find a mention at the end of the report about the irregularities which have been got rectified during the course of audit. The Monthly/ Quarterly reporting formats for concurrent audit were revised and circulated vide circular No. HO/I&C/38/09/680 dated 21.3.2009 and the same were implemented w.e.f. 1.4.2009. As the circular has been hosted on Banks portal, the soft copy of the formats can be downloaded at the branch. 5.4. SPECIAL REPORT Any special report (on prescribed Proforma) on frauds gross negligence /matters involving malafide / corrupt practices, may immediately be reported to the GM (Inspection & Control Dept.) HO under copy to Regional Office / Regional Inspectorate and Branch Manager. The Branch may be informed only if branch manager is not a party to the fraudulent activity. 6 Marking Serious Irregularities in the report
The irregularities observed by the concurrent auditors should be categorized in to two segments: Others & Serious. The Serious irregularities observed by the concurrent auditors should be marked as S and numbered as S-1, S-2 and so on in the report and Branches/ ROs/RIs are required to attend to rectification of such serious irregularities on priority but within maximum period of 45 days from the date of reporting. If the rectification is delayed beyond 45 days due to valid reasons, the same should be carried over in next report till rectified. The unrectified serious irregularities should also be discussed during RIAC meetings. The list of Serious irregularities as per Risk Based Internal Audit policy guidelines is given hereunder: List of Serious Irregularities
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1. On test checking leave record was found to be wrong. 2. Safeguards for remittance of Cash to Currency chest/ other branches/SBI /other banks and RBI not followed and security measures for the safety and safeguard of cash at the branch not observed. 3. Physical checking of security forms/ books is not being done as prescribed. Movement of security form is not as per prescribed procedure. 4. Long outstanding entries in remittance in transit (Suspense Remittance) for more than 15 days continue without proper follow up and all outstanding entries of Rs.50,000/- and above under various Suspense (General, Pension, Remittance, Festival and FCNR etc.), Clearing Adjustment/ Debit Notes, Main/ Local Branch clearing Heads 5. Untallied balances under any head for more than three months. The balances of ledgers/ balance reports are not being taken down and tallied. Subsidiary books/balance reports are not tallied. Subsidiary books/ balance reports are not tallied with General Ledger/ GL. Report. (The auditors have to incorporate the actual prevailing position at the branch). 6. Checking of books and transaction scrolls with vouchers is not being done as prescribed. 7. In-operative accounts are not being transferred to in-operative ledgers/ head and extent guidelines regarding operations & maintenance of such accounts not being adhered to. 8. Signatures on cheque book requisition slips/ letters of request not verified before issue of cheque books. 9. Operation in newly opened accounts particularly of heavy amount not being closely scrutinized. 10. Entries outstanding in clearing adjustment account or other local inter-branch accounts maintained for the purpose, for more than one month without valid reason, entries outstanding in Suspense account as also in inter-bank account, lying unadjusted for more than one month and no efforts being made for getting them adjusted. 11. Missing vacant locker keys/Master keys. 12. Joint registration of the vehicle/ tractor in the name of the borrower and the Bank not got done. 13. Advances granted without satisfying the eligibility criteria of the borrowers and without ensuring the end use. 14. Not getting insured/timely renewal the pledged/hypothecated securities wherever required with bank clause. 15. Valid certificate from the competent authority regarding Pollution Under Control not obtained. 16. PC is not logged out of system during the absence of authorized person. 17. Reports/ printouts as prescribed are not generated at the end of day and not checked/ signed by the concerned official. 18. Rejected transaction report, exceptional transaction report, Access log, etc. are not duly checked/ initialled by the Manager and are not kept under dual custody. 19. The prescribed mechanism of 2nd checking system is not being adhered to. 20. Debits to various income heads not being passed under the orders of the incumbent incharge/ Hall in charge (as applicable).
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21. Non adherence to prescribed KYC/ AML guidelines. 22. Un-authorized Interest Paid on Deposits. 23. When bills are purchased/ discounted or advance made there against the documents of title of goods are not proper, such as Railway receipts with company siding, transport receipts of unapproved transport companies etc. 24. Purchase/ discounting of accommodation bills/ cheques and instances of kite flying transactions. 25. When the cheque returning is high (both inward & outward) the matter is not being effectively taken up with the borrowers. 26. Export bills purchased without applying the proceeds towards adjustment of packing credit advances. 27. Packing credit advances not correlated to the amount of outstanding confirmed orders/ LCs. Export of goods not made, though the period stipulated for shipment has expired, and not taken up with RBI/ ECGC for extension. 28. Violation of FEMA in foreign exchange business. 29. Advances made, but plant and machinery not installed or securities not supplied /not purchases/ sold out/ found missing but no effective steps are taken to safeguard banks interest. 30. Significant omissions in obtention of prescribed documents and compliance of terms and conditions of sanction and B.C.C. not sent/ not kept on record (for cases under BM powers). 31. Prescribed formalities for creation of valid equitable mortgage (which is enforceable in the court of law/ taking into account the state laws as applicable) not complied with. 32. Quick mortality of borrowal accounts within one year of sanction/significant fresh slippage of account to NPA category. 33. Non-registration of the charge with ROC, wherever applicable. 34. Sanction of credit facilities to the borrowers in the prohibited/ restricted list compiled & circulated by RBI/ IBA/ HO. 35. Non-rectification/ persistent repetition of serious irregularities in large number of borrowal accounts. 36. Accounts where limitation has expired. 37. Non-checking/ overvaluation/ shortage of securities pledged hypothecated to the Bank. 38. Frequent devolvement/ invocation of Letter of Credit/ Bank Guarantee. 7 SUBMISSION OF CONCURRENT AUDIT REPORT & ITS COMPLIANCE
As per the Banks guidelines to the concurrent audit, auditors will record the irregularities/ shortcomings noticed during the day in a register on daily basis. The carbon may be kept for making two duplicate copies, one copy to be handed over to Branch Manager/ Hall Incharge against signature to ensure timely rectifications and auditor will mark off these entries jointly with BM. The irregularities rectified will not find place in subsequent reports.
PERFORMA OF REGISTER
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Irregularities Observed
Signature Of Auditor
How Rectified
Date Of Rectification
Signature Of CA BM
Monthly Reporting The monthly report shall be cumulative un-rectified irregularities as at the end of the month. Concurrent auditor shall submit the report within 7 days of succeeding month on the prescribed reporting formats & Annexures. One copy will be submitted to branch and 2 nd copy to Regional Office for follow up. Quarterly Reporting List of aggregate un-rectified irregularities and other details on prescribed formats/ annexures of the quarter will be submitted within 7 days of succeeding month of end of quarter. One copy each shall be submitted to Branch, Regional Office and Regional Inspectorate. Dropping of Irregularities The power to drop the irregularities after rectification will be the Concurrent Auditor till the quarterly report is sent to the Regional Office/ Regional Inspectorate. Once the Quarterly report reached the Regional Office, the powers of dropping irregularities, on rectification will be with the Regional Head. 8 CLOSURE OF REPORT
Monthly: The monthly report shall be submitted within 7 days by the concurrent auditor to the branch with a copy to Regional Office. The observations in the monthly report will be followed up with the branch by the Regional Office and report shall be closed within 45 days by Regional Office. Quarterly: The quarterly report shall be submitted to the Branch, Regional Office and Regional Inspectorate within 7 days. The discrepancies/ observations in the quarterly reports will also be followed up with the branch by the Regional Office, after being satisfied of the rectification of irregularity, will inform the Regional Inspectorate about the rectification of irregularities. The Regional Office will send the list of un-rectified irregularities to Regional Inspectorate on quarterly basis. The report shall be closed within 45 days by Regional Inspectorate. Fraudulent Acts Whenever fraudulent transaction is detected the concurrent auditor shall immediately report the matter to Regional Office, Regional Inspectorate & Inspection & Control department at Head Office as well as to Branch Manager concerned (unless the branch manager is involved). 9 CLASSIFICATION OF ASSETS
RBI vide its letter no DBS: ARS: No BC: 17/08.91.001/2002-03 dated 05.06.2003 has directed that all branches under concurrent audit w.e.f June 2003 should get all borrowal accounts reviewed from the concurrent auditors, who will also submit certificate as per format given below on quarterly basis: We certify that branch Office _________________ 1. Has complied with income Recognition and Assets classification norms laid down by the Reserve Bank of India, Classification of NPA of the branch are as under: Account As on last date of present QTR As on Last date of previous DD /MM/ YYYY QTR
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DD /MM/ YYYY Sub Standard Doubtful Loss Total NPA 2. All necessary Income and Expenditure vouchers have been passed for the Quarter Ended Mar / June/ Sept. / December ----(Year) The above certificates are to be sent to: 1. Recovery & Law Dept. Head Office New Delhi 2. Concerned Regional Office 3. Concerned Regional Inspectorate 3. Certificate of (a) 100% verification of Exchange Control copies of Bills of Entry etc., (b) 100% verification of Export Credits (Pre/ Post shipment against orders), (c) 100% checking of Forms A1, A-2 & A-3 and compliance of FEMA guidelines & (d) any other certification required by the Bank from time to time. No additional fee would be payable for these certificates. 10 REVENUE AUDIT All the Concurrent Auditors will also be looking to the revenue audit aspect of the branch. They will report on the under charges/over charges. They will also be responsible for recovery of under charges while inspecting the branches. There will not be a separate revenue audit of such branches where concurrent audit is conducted. 11 COORDINATOR FOR CONCURRENT AUDIT All Branches/Offices where concurrent audit is conducted should designate one coordinator so as to have smooth conduct of concurrent audit and Rectification of irregularities. The Coordinator who should be of the rank of Manager /Sr. Manager should be designated out of the existing staff of the branch. He has to facilitate and ensure that concurrent audit is done smoothly. He will do this along with the other duties that are assigned to him by the Incumbent. He will be a link between the Incumbent and Concurrent Auditor. 12 EXTENSION COUNTER. In case an Extension Counter is also working with any branch the Concurrent Auditors will check the same also once in a week, in case it is not possible to do daily checking. 13 OTHERS The Concurrent Auditor should be considered as a part of the branch and there should be no mutual distrust in this regard. The concurrent auditor may however, not sit in judgment over the decisions taken by the Branch Manager or an authorized official. This is beyond the scope of concurrent audit. The auditor will necessarily have to see whether the transactions or decisions are within the policy matters laid down by the Head Office, they do not violate the instructions or policy and that they are within the delegated authority. 14 CHECK LISTS FOR CONCURRENT AUDIT A check list indicating periodicity of the items to be checked is given hereunder. The Concurrent auditors should go through this list which is elaborate but not exhaustive and implement the same. In case they come across Items other than the items listed in this list these may also be examined and the discrepancies be reported. They may also go through the audit guidelines and draw the guidance from the same
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CHECK LIST SL. NO 14.1 ITEMS TO BE Checked A. Routine i) Cash/Petty Cash/Postage & Telegrams/ Stamps in hand and stock ii) IBCs iii) Travellers Cheques/Foreign Currency iv) Custody of Securities held against ~advances (Indira Vikas Patras /FDRs/Gold & Jewellery etc.) v) Safe custody of articles vi) Parcels . . vii) Securities Forms i.e. blank cheque books, drafts, cash orders, FDRs, TPOs etc. viii) Govt. securities and other: securities held by. the Branch on behalf of Head Office ix) Original and duplicate keys .of. Strong room, Safes, Safe Deposit Vault etc including keys of Godown i) Account opening forms of all types of accounts (introduction, photographs, nominations, verification of address, risk profile, threshold limit, PAN, Form 60-61 etc. Special checking of newly opened accounts and where substantial and. frequent withdrawal are taking place. ii) All Vouchers High value items to be examined in detail. iii) All books checked by the branch officials (cash book day books, long book. transfer. Journals, transfer analysis register, SGL, GL, checking of books, clearing register etc. to ensure that all vouchers are accounted for) . iv) Operations in inoperative/ illiterate accounts. v) Income and expenditure .incurred. All expenses over Rs.100/- sanction to be checked, all debits to income must be checked, correctness of interest charged, other service charges, out of pocket charges; penal interests, penalties etc., expenditure' supported by bills, ensure vouchers have been signed by the competent. authority vi) Use and updating of book of authorized signatures. register of lost documents vii) Govt. business is conducted in accordance with the instructions of the Govt/ RBI/ Head Office. viii) Ensure that the drafts TPOs Cash Orders issued forRs.50000/- and above are only by debiting the individuals account and not against acceptance of cash. ix) Issue and updation of pass books and statement of accounts x) Instructions for stop payment of cheques xi) Proper recording and stitching of daily vouchers xii) Cash management - custody, control' and movement of cash, proper delivery and receipt of cash, sorting of notes, maintenance of cash balance within stipulated limits, cash balance beyond insurance limit, accumulation of nonissuable notes, proper accounting of inward & outward cash remittance xiii) Observance of guidelines in respect of security forms in use. PERIODICITY To be checked on the first day and Once in a quarter on irregular intervals
j'j'
14.2
DAILY
DAILY "
~ ' _________
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xiv) xv) xvi) xvii)
Over detention of bills purchased. Timely execution, of standing instructions. Issue of cheque books - its Safeguards Daily dak, telegrams, bills etc. received and. disposed off.
xviii) Proper custody of AOF, Ledgers, Code books/check

cypher and other books/records/ documents during day and overnight' xix) Passing of all debits in suspense accounts by the incumbent xx) Immediate credit of out station/ local cheques up to Rs.15000/- as per head office guidelines xxi) Payment of interest for delayed collection of outstation cheques/remittance xxii) Any abnormal transactions in staff account. ( high amounts deposits or high frequency of operations) xxiii) Proper scrutiny of debits/credits to suspense/sundries and efforts to reverse them xxiv) Deduction and recording of service tax and TDS as per income tax rules xxv) Proper commission has been charged on draft issues/TT issued, bills purchased/discounted, RTGS/NEFT, LCs, Guarantees issued and in other transactions. xxvi) Check whether passing and signing powers in cash/transfer payments, debits relating to clearing and in interest paid accounts as under are being exercised properly Cash/transfer Debits payments relating to clearance (except income & expenditure) Rs. 1 lac Rs. 1 lac Interest paid account
Single authorized signatory Two authorized signatories Two authorized signatory one of which must be incumbent/hall in charge
Rs.10000/-
Above Rs.1 lac to Rs.5 lac Above Rs.5 lac
Above Rs.1 lac to Rs.10 lac Above Rs.10 lac
Above Rs.10000 to Rs.50000/Above Rs.50000/-
xxvii)
Check whether vouchers debiting income head are being signed by the incumbent in charge
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14.3
i)
14.4
Reconciliation of clearing adjustment entries and adjustment of outstanding reconciled entries. ii) Prompt action in disposal of inward and outward bills. iii) Proper custody of parcels, bills and accompanying documents. iv) Usance bills - acceptance, stamped adequately, correctness~ of due dates etc. v) Remittance in Transit and reversal of such entries. Efforts made for reversal of entries outstanding for more than 7 days vi) Spurt in deposits/ advances. vii) Proper recording of co-acceptance of bills viii) Whether Banker Account(s) are reconciled, Follow up of unreconciled entries of more than seven days. Fund management in bankers account excess balances/overdrafts Complaints received and disposed off. Cash is checked at least once in a fortnight by the official not connected with its custody. Check that no outsider and unauthorized person is having access to Bank's books of accounts /ledgers/registers etc. i)
Once in a week
Fortnightly
14.5
14.6
Whether the books/ ledgers; have been balanced. Correctly Monthly up to the end of previous month. Also whether the concerned officers are countersigning. The balances remaining untallied be reported in Manager Month1y Certificate to RO. ii) Monthly vouchers of postage, telegrams, couriers etc. iii) Balancing of impersonal accounts. iv) Maintenance of account opened and closed, majority attainment registers. v) All sundry/suspense/clearing adjustment entries outstanding for more than one month and efforts made to adjust these. vi) Whether income and expenditure vouchers are properly recorded vii) Whether all circulars/compendiums/.manua1/books etc. are being maintained properly. viii) Recovery of locker rent, safe custody fee, inspection and other incidental charges. ix) Observance of guidelines for operation of safe deposit vault. Monthly , Of" X) submission of statutory returns xi) Timely submission of control' and other returns test checking for their correctness to cover all returns at least once in a quarter. xii) Lodging of scrolls with Link branch /SBI/ RBI in respect of pensions paid to the debit of suspense Pension Account-and 'seeking timely reimbursement thereof. xiii) Observance of security measures to be checked at irregular intervals including alarm system. xiv) Exercise of expenditure powers vested in the incumbent and seeking confirmation where powers exceeded under various heads. xv) Maintenance of deceased claims register - timely settlement. xvi) Tallying of cash orders outstanding with the Registers and G.L. xvii) Ensure that leave record of staff is being maintained properly xviii) To ensure that check cyphers and code books are kept under the safe custody and are being used by the authorized official only. i) Physical verification of various' Govt. and, other, securities -- Quarterly
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--,
ii) iii) iv) v) vi) vii) viii) ix) i) ii) 14.7 iii) iv) v) vi)
vii) viii) ix) 14.8 i)
safe custody maintenance of movement register, collection of interest etc. Commission on Govt. Business whether recovered. Credit of periodic interest to FDs and PD accounts. Specimen signatures of RBI authorized officers (if supplied) under personal custody of Incumbent. Gun License - Renewal inclusion as retainer of all the guards, age of ammunition. Fire fighting arrangements. Working of customer service committee and other customer service related issues. Physical verification of security forms such as, cheque books, draft books, TPOs. Cash Orders, FD Rs with the relevant registers. All other items mentioned against (to be checked on the 1st day) Duty sheet of staff whether rotations are being done. Separate records of Non-Resident /Foreign Currency accounts including their AOF - issuing of cheque Books with prefix NRE etc. Physical checking: of SFF items with the list supplied by the Regional Office - its upkeep Destruction of old record as Per Head Office guidelines. Maintenance of Old Record Register and whether all the Half yearly books are entered therein. Incidental charges service charges in saving accounts (including inoperative) where minimum balance is .not maintained Payment of SB interest to institutions prohibited to open savings accounts. Half yearly checking of Guns /Ammunitions by test firing Verification of lease deed of premises for renewal etc. Whether the prescribed certificate of life, reemployment, re-marriage etc. obtained once in a year in October/November in all pension accounts Sample checking of pension payments - at least 30% Availability of Power of Attorney of the signing officers in the branch.
ii)
Must also comment on
i)
14.9
b, Credit i) Vouchers relating to all loan accounts. ii) Temporary overdraft allowed/ excess accommodation allowed/clean over draft whether allowed by the Competent Authority and adjusted: as per condition or Sanction letter. iii) Drawls against clearing, iv) To check all loan documents in respect of .loan releasedproper filing up of prescribed forms; properly executed. And stamped, entry in document register v) Recovery of processing fee for loans sanctioned enhanced or renewed. vi) To check whether' all the terms and conditions stipulations in the sanctions have been complied with before disbursement of loans (new and enhanced/additional facilities) and BCC stands compiled/submitted to sanctioning authority. vii) Pre-sanction appraisal in loans sanctioned, enhanced or renewed is proper, particularly realistic sales projections,
Daily
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techno-economic viability etc. viii) To check whether all the loans, released have-proper: sanction and in cases where vested powers have been exceeded, confirmation of the competent Authority has been received/sought. ix) Securities encashed (FD/ NSCs/ Vikas Patras etc) the proceeds have been credited in. the respective loan accounts, unless DP 'of the remaining securities permitted release to the borrowers x) End use/diversion of funds in cash: credit, accountschecking from the names of beneficiaries of the debits allowed. . xi) To check whether documents relating to IBCs are kept under the safe custody during the day and over night; xii) Guarantees issued are on prescribed format, inclusion of clause restricting period of invocation and recorded in banks register, contra voucher passed and counter guarantee obtained.
xiii) xiv)
Release of advances covered under selective credit control as per RBI Guidelines. To ensure that- all LCs opened are entered in the LC register, margin money obtained, contra vouchers passed and. appropriate commission (including amendment charges, if any) charged To ensure that all bills received under the LC have been entered in IBC register on the same date. To ensure .that all rules, regulations and conditions laid down by the Head Office/ RBI/ FEDAI have been followed for opening of LC and FLCs. Custody of loan documents /title deeds during the day and over night.
Daily
xv) xvi) xvii)

14.10 i)
Daily
Scrutiny of bills purchased/discounted/under AOBC limitMTR of approved transporters, no bills on allied concernstheir entry in party wise registers and tallying the same. ii) Whether documents of loans of and above Rs. 5 crore have been got vetted from the legal retainer prior to disbursement of loan and post-facto in loans below Rs. 5 crores or otherwise stipulated in sanction. iii) Whether any adhoc/temporary limits have been allowed to customers in whose case BCC has not been submitted/ or the terms and conditions of sanction have not been fulfilled. In case such facilities are extended whether sanctioning authority has allowed this. 1% penal interest is charged on adhoc facilities. iv) Overdue DD/BD proper follow up and reporting v) To check whether bills purchased are sent to the drawee/ drawee bank on the same day and whether follow up is proper. vi) To ensure that the guarantee commission is charged at the stipulated rates for the full period of guarantee including the claim period. i) To check whether the charge with the ROC has been got registered within the stipulated' period of 30 days and the
Weekly
Weekly
14.11
Fortnightly
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relevant fee receipt for submitting the application is held on record.(in case of limited companies) ii) To check whether equitable mortgage of immovable property~ have been validly created for original and enhanced limits. iii) To check proper maintenance of important registers, such as, a) Discretionary Power. b) Limitation c) Complaints, d) Securities verification register. e) Insurance iv) To check whether proper follow up i.e. notices, diary, advocate fee, court attendance etc. is being done in sick accounts/protested advances/suit filed/decreed accounts. v) To check frequent returning of cheques/bills purchased/discounted/accommodation bills. vi) Refinance, from NABARD/IDBI etc., if applicable, timely lodgement of applications and proper follow up. vii) To ensure that bills received for collection are not over detained and drawer instructions are followed for realization, the follow up is effective. 14.12
Fortnightly
i)
Loan proposal received and disposal register - its proper maintenance and entry in Proposal Tracking System (PTS). How proposals are handled etc. ii) Checking of regular submission of inventory/stock statement/book debt: statement- No operations allowed in loan account where inventory has not been submitted and DP worked out for over 3 months iii) Physical verification of securities pledged/hypothecated along with the branch manager or any other officer authorized for the purpose (plan all the securities verification with the branch manager and tentative plan (quarter wise) be submitted along with the first report. Also securities are insured for fire, theft and burglary. iv) Checking of other securities, such as FDRs/NSCs/Vikas Patras/ LIC policies/Shares. etc, Similarly checking of joint" registration: joint insurance and physical Verification' of transport /tractor/vehicle loans. v) Checking of DP register - its maintenance, proper calculation of drawing powers (even for sub limits) signatures of the Branch Manager Etc. vi) To check that all limits are reviewed/ renewed every year and ~the operation is not allowed; under lapsed" sanction. vii) To allow ad-hoc facilities only to such borrowal accounts whose asset classification is standard regular and such limit is maximum for three months, and records proper justification of its sanction. viii)To check that the stock pledged to the Bank is valued as per invoice/market value/cost prices which ever is less. The stock statement tallies with book of accounts. ix) Submission of control returns in time and their correctness (in respect of loans and foreign exchange) x) To verify that at the time of change in interest rates on advances, the amended rate of interest is noted on borrowal account ledgers. Penal interest, wherever applicable is charged
Monthly
Monthly
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xi) To verify that up to date interest is levied on Bills

purchased/discounted, penal interest for overdue period and penal interest for full period in case of dishonouring/returning of Bills/cheques.
xii) To verify that inward bills for collection should not be

outstanding for more than three months in case of Demand Bills and one month after the due date for usance bills xiii) To ensure that all advances including priority sector, consumer loans, housing loans and loans in other thrust areas have been made strictly in accordance with the Head Office guidelines and payments are made to the suppliers under authority of the borrowers and receipts are held in record. xiv) To ensure that the Branch Manager is taking up the matter with the party in case of high returning of bills and is also referring to the sanctioning authority. xv) Recovery of NPA, irregular/sticky and protested accounts - personal follow up and correspondence. xvi) Recovery efforts made under Agriculture Recovery act, State Recovery Act and other summary enactments. xvii) Insurance of outstanding import bills.
Monthly
xviii) Monthly declaration under whole
turn over pre/post shipment credit, guarantee and payment of premium xix) To ensure that after the expiry period of the guarantee registered notice is sent to the beneficiary that the liability of bank has ceased and the liability vouchers are reversed. 14.13 i) In cash credits and book debts- whether the account has been Quarterly categorized as NPA where stock/book debt statements are not received and checked for continuously 90 days (even when the unit is working). In case where regular/ad-hoc credit limits could not be reviewed /renewed with in 90 days from the due date/date of ad-hoc limit - whether the account has been treated as NPA. \Whether quarterly/monthly reports of monitoring officers, complete in all respects, are being received - and their follow up. Receipt and scrutiny of QIS Statements received 'from the borrowers and fixing operative limits. While reporting comments of the following be specifically made . a.) Whether there is any deviation in actual and budgeted figures of Production/Sale/Profit/Bank borrowing etc.? 10% deviation in budgeted figures is accepted. In case deviation is more reasons may be enquired nom the borrower and Branch Manager b.) If the budgeted production/sales etc. have not been achieved, then how the Bank credit has been utilized. Diversion of funds may also be ascertained from the borrower. c.) Whether the holding of inventory and receivables are as per norms / past trend? If there is increase, the reasons be given d.) If the net working Capital (Total CA-Total CL).has decreased and or the current ratio (total CA divided by total CL) has improved or otherwise the reasons be found
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ii)
iii)
iv)
and given. v) To ensure that the processing fee is recovered on all eligible borrowal accounts. vi) To ensure that guidelines on income recognition norms, asset Classification and provisioning have been followed strictly as per HO/RBI guidelines. vii) Claiming of interest subsidy. viii) Review of all loan accounts with fund based limits of Rs. l 0.00 lacs and above. ix) Personal Monitoring by the incumbent In charge of all accounts with fund based credit limits of Rs. 50 lacs and above. x) Test checking of RCC submitted by the branch for its accuracy 14.14 i)
Quarterly
14.15
Interest rate on working capital advances of borrowers with fund based limits of Rs. I.OO crore and above determined' on the basis of score/ratings as' prescribed by the Head Office ii) Review of rescheduling of repayment programme wherever required. iii) Obtaining of balance confirmation letters by the branches. iv) Comments~ on increase/decrease of NPAs irregular account - comparative position: their follow up action Half yearly initiated for recovery up gradation of quality of assets from Sub-standard to Standard etc. v) Inspection of securities at least once in six months (in case of ELBs having Chief Managers also) by the AGM/CM alternatively. vi) Whether fresh valuation of property mortgaged with the bank in certain loan accounts needs to be got done (indicate accounts and properties) ATMs: Check ATM operations as per DIT-HO guidelines. (HO Circular No.DIT/04/2006-07 Dated 27.05.2006) Comment whether Security arrangement ,ambience etc. in ATM are satisfactory. Checking of ATM cash with CBS balance. Monthly
6.
FOREIGN EXCHANGE BUSINESS FOREX BUSINESS- areas to be covered The audit must encompass the audit of entire Foreign Exchange Business at the Branch. The Audit must be viewed from the prospective of analyzing and evaluating the compliance level by branch to the Notification / Rules / Regulations / Directions issued under FEMA from time to time in the backdrop of KYC norms. Suggested checklist for submitting monthly FEMA Audit report is given in Annexure II C which is to be annexed to Monthly Concurrent Audit report. A. Inward / Outward remittances 1. Accounting / reporting and authorization of remittances. Purpose of remittance should be ascertained and wherever applicable FIRC should be issued. 2. Checking of commission and expenses. 3. All inward remittances are verified (including remittances received by religious / charitable / social institutions for which prior permission is required from the Government of India.)
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4. Verify and confirm (monthly concurrent audit report) that large inward remittances of US$ 50,000 and above or its equivalent were received in well introduced accounts and wherever substantial increase in outward remittances had been noticed, that these transactions were carried out in strict compliance of FEMA guidelines. B. Forward Contracts- Purchase / Sale: 1. Verify sanction limits for booking contracts. 2. Whether documentary proof is held 3. Whether appropriate register is maintained. 4. Whether stamped agreement / deal confirmation has been obtained. 5. List out the forward contracts outstanding in the branch books beyond 15 days from the expiry of option period. C. Guarantees: 1. Guarantees issued / extended / cancelled during the month. 2. Rate at which commission charged/ calculations. 3. Proper authorization, documentation, recording etc. 4. Verification of securities accepted as margin. 5. List out the expired Foreign Bank Guarantees. D. Export Bills: i) Collection outstanding ii) Purchase outstanding iii) Negotiation outstanding iv) Overdue export bills under AAEBR a/c. E. Import Bills: i) Letter of credit outstanding ii) Bills received under L/c outstanding iii) Collection Bills outstanding iv) Loan against documents (LAD) outstanding F. Non Resident Accounts: i) NRE Accounts, all types ii) NRNR Accounts iii) FCNR Accounts iv) NRSR Accounts v) NRO Accounts vi) RFC (Domestic) vii) RFC of Non resident Indians who have come back to India.
G. Loans to Non Resident Indian against their deposits. Loans to Indian Residents against Non Resident deposits. H. I. EEFC Account Forward Contract outstanding.
Periodical Checks to be conducted with regard to: 1. 2. 3. 4. 5. 6. PCL (Pre-shipment Credit) Details of those Loans, which have been liquidated otherwise than from proceeds of export bills. Outward Remittance Register Inward Remittance Register Bills of Entry Register Export Bill register Import Bill Register
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7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.
Non Resident Accounts (all types of) Register Forward Contract Register To ascertain details of remittances towards overseas investments by resident Indians and Investments in India by Non Resident including portfolio Investment. Any cases of write off of export bills Details to be furnished. Details of cases, where reduction in invoice value of proceeds have been granted. Details of cases, where reduction in invoice value of exports has been permitted by the competent authority and in line with FEMA guidelines. Details of cases of un-drawn balances. Cases of project exports, if any in the branch. Any advance payment against imports. Any cases of travellers seeking foreign exchange beyond the prescribed limits delegated to ADs. Any accounts of foreign nationals maintained. Submission of A-1,A-2 & A-3 to RBI 100% checking of A1,A-2 & A3 forms and certificate of compliance of FEMA guidelines for all Forex transactions . Any outward remittance effected for more than USD 1,00,000 towards consultancy services Remittance for advertisement on the foreign television Remittance for maintenance of foreign currency account outside India Inward / outward remittances for USD 50,000 and above or its equivalent and ensure provisions of FEMA are strictly complied with.
15.3.
Periodicity and timely submission of following statements to be checked: 1. 2. 3. 4. 5. 6. 7. Whether calendar of returns / statements showing due date and date of submission is maintained. XOS statement to be submitted half yearly to reach RBI within 15 days from the reporting period. BEF Statement to be submitted half yearly to reach RBI within 15 days from the reporting period. R-Return statements to be submitted fortnightly to reach RBI within 15 days from the reporting period EBW Statement for export bills written off to be submitted half yearly to reach RBI within 15 days from the reporting period. ORS remittances made for establishing offices outside India - To be submitted half yearly to reach RBI within 15 days from the reporting period. Statements to be submitted by the bank as a whole to Cental Office of RBI: : Statement of operations in FCNR Accounts : Statement of Earnings from Tourism : Statement of operations in NRE Accounts : Statement of operations in NRE Accounts : Statement of operations in RFC Accounts
STAT 5 STAT 6 STAT 8 STAT 9 STAT 10 8.
100% verification of Bills of Entry to be confirmed and certificate sent every month to Head Office as per instructions with copies marked to Regional Office & Branch.
Irregularities noticed if any and not rectified must be incorporated in the Monthly Report as Usual. Serious irregularities / observations must however be reported in the SPECIAL Report addressed to the General Manager (I&C) HO.
15.4. A
CHECK LIST FOR VERIFICATION i) Packing credit allowed under proper sanction backed by L/C of approved bank or confirmed order, opening of separate
PERIODICITY DAILY
Page 25 of 55
ii) iii) iv) v) vi)
vii) viii) ix) x) xi)
xii) xiii) xiv) B i) ii)
iii)
iv)
v) vi)
account, ECGC cover and compliance of other conditions. Checking of foreign documents purchased/negotiated under FLC and their prompt despatch. Payment of import bills Over detention of import bills under collection Due date diary for usance foreign bills , recovery of interest on import bills from the date of debit to our NOSTRO account Levy of correct charges on foreign inward/outward remittances, FOBC, travellers cheques, forward contracts, counter signing of import bills of exchange etc. Recovery of interest on overdue export bills Correct application of exchange rates Levy of correct charges, interest, exchange rates, overdue interest on FOBP/FOUBP/FOBNLC etc. Payment of overdue interet on FCNR-NRE fixed deposits To ensure that all rules regulations and conditions laid down by the Head Office/RBI/FEDAI have been followed for opening FLCs. Transactions in non-resident and other foreign currency account as per RBI/Head office guidelines Check all outward remittances on 100% basis. Whether the remittances are supported by forms A1 & A2 filled in all respects and are in order. To check that the branch has recovered the ECGC premium of all the PC advances as per Head Office Guidelines. To ensure that all pre-shipment and post-shipment advances are covered by the ECGC. IN CASE OF PC advance of more than Rs. 15 lacs per borrower falling under standard asset and in case FDBP/FUDBP/PSL advance of more than Rs.25 lacs falling under standard regular category, notice has been sent to the ECGC within 30 days of disbursement whereas in other cases prior approval has been obtained. In all fresh cases of PC advances of Rs.15 lacs and above and in all fresh cases of post shipment advances of Rs.25 lacs and above prior approval of ECGC is mandatory. Bank has obtained whole turnover Packing Credit & Post shipment guarantees which cover automatically PC advances up to Rs.15 lacs/post shipment advances up to Rs.25 lacs per borrower. In case the exporters also take separately pre-shipment and post-shipment policies of ECGC, the bank can get higher percentage of claims in case of invocation of guarantees. The auditors should ensure that this happens. Ensure- that-the commercial and political risks are also covered of all advances when ECGC policy is taken by the exporters. Whether GR forms / shipping Bills are randomly verified. Inward/Outward remittances of US$ 50,000/- and above or its equivalent to undergo snap audit. Inward remittances of US$ 50,000/- and above or its equivalent have been received in well introduced accounts under strict compliance of FEMA provisions.
WEEKLY
i) ii) iii)
Timely lodgement of claims from ECGC and proper follow up FORTNIGHTLY of outstanding claims against ECGC/DICGC. To verify correctness of GR forms reported in R returns Whether R returns are promptly submitted to RBI on a
Page 26 of 55
fortnightly basis and the extant guidelines issued from time to time and provision of FEMA are strictly followed by the branch. iv) In terms of the directions issued by RBI, Concurrent Auditors must check forms A-1 A-2& A-3 and compliance of FEMA guidelines as on going basis along with R Returns to be sent to RBI and must submit a quarterly certificate on the 1st of the following month in the given format on 100% checking to IBD, HO with copies marked to Regional Office and Branch. Observations if any may be attached to the certificate. 1. Check foreign bills negotiated under letter of credit 2. Check whether debits & credits to FCNR and other non resident accounts are permissible under the rules 3. Examine extension and cancellation of forward contracts for purchase and sale of foreign currency. Ensure that they are duly authorised and necessary charges are recovered. 4. Ensure that balances in Nostro accounts in different Foreign Currencies are within the limit prescribed by the Bank. 5. Ensure that the overbought/oversold position maintained in different currencies is reasonable taking into account the foreign exchange operations. 6. Ensure adherence to the guidelines of RBI/HO about dealing room operations. 7. Ensure verification/reconciliation of Nostro/Vostro accounts transaction/balance. 8. All FCNR receipts are issued by the branch against consideration, i.e., only after receipt of funds in respect of each of these deposit accounts. High value deposits need special attention. 9. FCNR/NRE accounts shown outstanding at the branch record do not vary with records maintained with the International Banking Division, HO. 10. 100% verification of Bills of Entry/Postal/Courier wrappers and issuance of a certificate (as per Annexure IIA for having carried out 100% verification of Bills of Entry as to its genuineness, acceptability and compliance of FEMA provisions, to the Inspection & Audit Division, HO on the 1st of the following month, with a copy to Branch, Regional Office and IBD, HO. If there are no bills, a NIL certificate must be submitted. 11. Insurance of outstanding import bills 12. Monthly declaration under whole turnover pre/post shipment credit guarantee and payment of premium. 13. To verify that in P.C. advances outstanding for more than 180 days, general lending rate of interest is charged. Also commercial/ pena1 interest has to be recovered if P.C advance is adjusted out of rupee payment 14. To ensure that no further advance, has been allowed without the, approval of ECGC to the party where default has been reported about the party to the ECGC. 15. To ensure that in case of FUDBPs outstanding beyond expi.lry of usance period or 180 days (whichever is earlier) or in case of FDBPs outstanding beyond 30 days, the borrower has applied for extension in realization period and the same has been forwarded to RBI/ECGC by the- branch. Where no such permission is, obtained, interest as applicable to general lending is charged 16. To ensure that proper follow up is being done' in NOSTRO
Monthly
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accounts. D 17. 18. 19. 20. 21. Verify on surprise dates during a month, all Inward foreign bills on hand pending realisation as to: Whether all the accompanying documents such as Bills of Lading etc. are in tact; Whether any bills are detained for more than the time allowed by the senders; Whether any documents have been released without receiving payment; Ensure that Foreign Inward remittances received by religious institutions/others are within the purview of the Guidelines issued by the Government; Overdue export bills negotiated / Purchased and its crystallisation. Overdue packing credits Outstanding under IRSA for more than 7 days. Advance payment received but exports not made even after 1 year of receipt of funds. Claiming of interest subsidy Monthly -do-
-do-
-do-
22. 23. 24. 25.
-doMonthly
26.
Quarterly
16
CHECK LIST to assess the level of customer service at the branch (Applicable only for branches conducting Govt. Business)
How long does the delivery of Receipted Challans taken when tendered with Cash What is the time taken for delivery of Receipted Challans if tendered with cheques Whether the branch is issuing paper tokens Whether the date of tender and date of delivery of Receipted Challans mentioned in paper token What is time taken for delivery of Receipted Challans when tendered with outstation cheque How long does the branch take to submit the daily scrolls to Govt. Departments When does the branch submit the monthly statement to Govt. Deptt. 17 REVENUE AUDIT
30 minutes/ more an hour 3 days/ one week/ more than a week Yes/ No Yes/ No One Week/ More than a week 2 days/ 5 days/ more than a week 1st week of next month/ more than a week/ after 15 days
CHECK LIST FOR REVENUE AUDIT The following heads be test checked to find income charged less or more. Similarly expenditure paid more or less be test checked. Income Head a. Interest on b. Cash Credit c. Overdraft d. Term loan e. Demand loan f. Packing credit g. Bills purchased under LC h. Overdue period of -DD purchased
Page 28 of 55
- Bill discounted - Foreign outward bill purchased or discounted. - Deposits with other banks. Penal Interest a. Penal interest on non- submission of QIS within prescribed period. b. Penal interest on delayed submission of stock/ book-debt statement c. Penal interest on non-submission of renewal proposal. d. Penal interest on non- compliance of terms & conditions of the sanction. .Processing/ Upfront fee. a. Commitment charges for non utilization of sanctioned limits. b. Upfront fee on term loan. c. Guarantee & annual review fee payable to Credit Guarantee Fund Trust in respect of SSI limits. d. Process Fee Charged for fresh sanction/enhancement/ renewal of limits/extending validity of sanction. Commission a. b. c. d. e. f. g. Demand draft/ TT/ TPOs/Cash Order RTGS/NEFT Bills/cheques Purchased Inland & foreign LC(for issue, amendment & renewal) Inland & Foreign guarantee (far issue, amendments & renewal) Inward/outward cheques/bills for collection. Incidental charges/service charges on current, cash credit, overdraft, inoperative saving/ current account, Including charges for non-maintenance of minimum balance. Inspection charges in borrowal accounts
All debits to various Income heads. a) All debits carry proper sanction I authority, b) Propriety of such debits Recoverable debits to income heads, a) Recovery of go-down keeper/ chowkidar salary. b) Expenses incurred for inspection of securities. c) Recovery of Telephone, Telegram, postage/ overtime charges) d) Payments made to the auditor far stock audit. Miscellaneous Recovery of subsidy for (i) (ii) (iii) Technology up-gradation loans for SSI Units from SIDBI Financing of cold storage from National Horticulture Board Any other (to be specified)
Expenditure Head. I. Interest paid on a) Saving Bank deposits
b) FDR or any other term deposit be thoroughly examined entry-wise. c) Call deposit. d) Current account (RRB & deceased accounts)
Page 29 of 55
2. Interest charged by bankers on borrowing. 3. Salary, leave encashment, Post Qualification Allowance/Fixed Personal Allowance etc. In addition, auditor should a) Check whether all capital & revenue expenditure incurred are within the powers of the incumbent & in case it exceeds, confirmation has been obtained from the competent authority. b) Wide variation in expenditure incurred on Telephone: postage & Telegram, Stationery & office supply purchased, OCM or any other expenditure sub-head be examined Check list Norms for checking S No 1 2 3 4 5 6 7 8 Head of Account Income Penal Interest where chargeable Processing Fee/Upfront fee Inspection charges in borrowal accounts Incidental Charges (In all CC/ OD/ Current Accounts) All debits to Income heads Interest subsidy claimed/ received from RBI/ other agencies Interest received on Deposits kept with other banks Locker Rent Year wise position of locker rent received and in arrears (to be shown separately) Expenditure Head Check whether capital & revenue expenditure inccured falls within the powers vested with Branch Incumbent. If not, whether confirmation was sought from appropriate authority( Exceptions be only reported) Telephone/ postage/ telegram expenses be checked Extent of Checking to be done 100% 100 % 100 % 50 % 100 % 100 % 100 % 100 %
100%
Only where expenditure has shown vide variance over the previous period
CUSTOMER SERVICE- CHECK LIST CUSTOMER SERVICE 1. With a view to achieving effective implementation on various Banking Service Committees recommendations in their true spirit, Bank is committed to implement all the following specific areas on 100% basis, in all the operating branches without exception. These areas are: 2. Immediate credit of outstation cheques up to Rs.15,000/3. Delay in collection and credit of outstation cheques, Bank drafts etc. beyond the stipulated time frame to be compensated by payment of interest at prescribed rate, without customers asking. 4. Prompt issuance of drafts, Bankers cheques/pay orders. 5. Promote awareness among the banking public about the availability of nomination facility. 6. Updating of pass-books and prompt delivery thereof to the customers. 7. The auditors have to verify and specifically comment on the position of implementation of all the aforesaid 5 specific services at the DAILY
Page 30 of 55
branches. To ensure that all outstation cheques/instruments received for collection during the previous day are duly entered in a separate register. 9. To ensure that the reasons given for not affording immediate credit of the instrument are appropriate 10. To ensure that the branch has collected only collection charges and out of pocket expenses in case of all the OBCs where the immediate credit is afforded. 11. In case the instruments under immediate credit facility are returned unpaid ensure that branches have charged applicable interest and follow the recovery steps stipulated To ensure that in all the new deposit accounts, the newly designed account opening forms (i.e., with nomination facility) are invariably obtained. In case the depositor/account holder does not wish to avail the nomination facility, the same should be recorded in the account opening form itself under the depositor/account holders authentication 8. CHECK LIST FOR COMPUTERIZED WORKING OF BRANCH 1 CHECK LIST FOR CONCURRENT AUDITORS FOR DAILY COMPUTERIZED WORKING OF BRANCH a) Whether al the transactions are subject to calling by Officer with vouchers/cheques from the long book at the end of the day and the same is being signed by posting official, Checking Officers and second Calling Officer & preserved separately? b) Whether the second checking system is in vogue? c) Are all the postings in individual GL accounts being authenticated by designated officials instantly ~and the output reports are being signed by the segment in-charge? d) Are all the following control reports being generated and signed by the Incumbent In charge of the Branch? v) Exceptional transactions ii) Non-financial audit trail/audit trail. iii) Authorized Users, iv) GL affected balance e) Is the Overdrafts Statements taken out daily and signed personally by Branch Incumbent and kept for' future record? f) Do 'the users log out when they are not on their seats g) Whether the system of security norms such as user enabled/disabled, access level to be observed during day begin, day end etc. are being strictly adhered to 2 a) Are the staff members operating computer maintain secrecy of FORTNIGHTLY passwords and also changing the same at prescribed intervals to avoid their misuse? a) Is entry to the CPU Room restricted to authorized persons only? MONTHLY b) Are eatables, tea and smoking being permitted in the Computer Room? c) Is the place around terminal/PC kept clean and dust free? d) Is the server/PC getting its power supply only through the UPS ? Whether the other electrical fittings/appliances except one or two emergency lights connected through UPS have been got disconnected during course of inspection? Whether dedicated earthing (voltage <2 V) provided to electrical
Page 31 of 55
e)
f)
g) h) i)
j)
cables through UPS for computers and properly insulated? Is the CPU room kept locked overnight? Are logical initials (IDs) of all the concerned staff I officials created & maintained as prescribed Whether the system takes care of the fact that any user not changing password at the prescribed intervals is disabled automatically? Whether the lDs of staff members transferred/left the branch are deleted from the system? Checking of interest sheet on loan accounts is done for correctness of rate of interest and for penal interest? Whether the various parameters for loan accounts and rate of interest. are correctly fed and all the changes in the interest rates structure, service charges, incidental charges etc. are being fed immediately on the date of change so as to avoid Revenue Leakage? Any time lag, so noticed, be highlighted along with the resultant Revenue Leakage, if any. Are the printouts of day end reports such as transaction listing long book, weekly, balance report, check sum report duly signed by concerned supervisory officials and preserved at a safe place within the branch at day end. Whether undertaking for maintaining secrecy has been obtained QUARTERLY from all Users? Are printouts of all ledgers taken on quarterly basis and stored safely for future reference? Whether the master creation/modification in the parameters are being done by an authorized officer? Is the Branch/Extension Counter maintaining sufficient buffer stock of Computer stationery, Magnetic media and consumable items? (The auditors should ensure that these items are indented from respective R.O. in order to minimize the cost or else from dealers authorized by R.O) Are adequate number of Halion gas based fire extinguishers Installed at the Branch and at least one of them is close to the CPU room?
k) l)
m)
a) b) c) d)
e)
18
KYC/ AML POLICY- IMPORTANT GUIDELINES
Updated KYC & AML Policy be referred as available on OBCWEB.
Page 32 of 55
MONTHLY REPORTING FORMAT Date: The Regional Head Regional Office ____________
Re: Concurrent Audit Report of ___________ Branch _____________ Region for the month of ______ 200__.
We submit herewith our report as above (summary, Annexure A&B). The Concurrent Audit report was discussed with the Branch Head. The irregularities reported earlier and persisting are detailed hereunder:PENDING ISSUES Details of Irregularity Branch Remarks indicating latest status of rectification
Report Ref. And date
Section No.
The report on Concurrent Audit was discussed, Rectification to the possible extent is done
Branch Manager Encls: Annexures: 5, 8, 11, 11A Copy to: The Branch Incumbent Branch Office ---------------------
Concurrent Auditor
Page 33 of 55
Concurrent Audit Report of __________ Branch for the month of ___ 200 SUMMARY 1. Branch Operations: 2. Deposits: (With reference to growth, achievement of target, observance of KYC Policy for opening of and operations of accounts). 3. Advances: (With reference to growth, achievement of target, achievement under priority sector lending, credit appraisal, adherence to the Banks lending policies and guidelines, compliance of terms and conditions of sanction, judicious exercise of lending powers, documentation etc. in newly sanctioned/enhanced/renewed borrowal accounts). 4. NPA Management: (Follow-up/recovery in NPA accounts, suit-filed/decreed accounts with special reference to high value NPA accounts of Rs.10 lacs and above). 5. Early Alert Signals and Special Mention Accounts: (Timely identification of EAS & SMA accounts in terms of guidelines issued by the Head Office, prompt reporting thereof to the Regional offices, action taken to rectify the irregularities.) 6. Compliance with laid down systems and procedures. 7. Revenue leakage and expenditure control. 8. Sensitive accounts: (Dormant/inoperative accounts, Suspense accounts, Inter-Bank, MBC/clearing IRSA etc.) 9. Cash Management/ Clean Note Policy/ Counterfeit Notes: (Deficiencies should be listed) 10 Any other aspects, which, in the opinion of the Concurrent Auditor, should receive immediate attention of the Management. adjustment,
Concurrent Auditor
Page 34 of 55
Concurrent Audit Report of ______________ Branch for the month of ______ 200 . We certify that we have checked the transactions / activities of the Branch on daily and monthly basis, in accordance with the guidelines for Concurrent Audit and the Manual of Instructions of the Bank. We certify that the transactions have been found to be in order except and to the extent mentioned herein below:1. Physical verification of cash / Cash Transactions (Details of Cash in Detail book (gutka) is attached. Observation
Branch Comments:
2. Profit & Loss Account All expenditure Vouchers and cases of exceeding powers Observation Branch Comments:
3.
All Suspense Accounts /Inter-Bank accounts/Clearing Adjustment/MBC/ IRSA/overdue bills purchased/IBC/OBC/ Sundry Accounts Observation Branch Comments:
Age-wise Break-up of outstanding entries: (Each GL Head) Period Debit No. of Entries Up to one months One to three months Over Three months
Amount
Age-wise Break-up of outstanding entries: (GL Head) Period Debit Credit No. of Entries Amount No. of Entries Up to one months One to three months Over Three months
Amount
4. KYC Compliance for Account Opening in SB/ Current/ Demat / Loan Accounts: Observation Branch Comments:
5. Monitoring of transactions in newly opened SB & Current accounts Observation Branch Comments:
6. Compliance of AML Guidelines - Cash Transaction Reports (CTR) & Suspicious Transaction Reports (STR)
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Observation
Branch Comments:
7. Transactions in inoperative/dormant accounts: Observation
Branch Comments:
8.
Fresh Advances disbursed during the month : Sanctioned at BO/RO/Ho (including compliance of terms of sanction entering of MIS codes and end use of funds) (Rs. in lacs) Name of Facility(s) Sanctioning Credit Rate of Amount Remarks account Authority Rating Interest Total Observations 9. Branch Comments
Guarantees issued and LCs opened during the month: Sanctioned at Branch level / Regional office / Head Office (Rs. in lacs) Name of account Sanctioned Amt of BG / Credit Comn. Limit LC Rating Total Observations Branch Comments
Amount o/s
10.
Temporary overdrafts allowed in SB and Current accounts beyond discretionary powers of BM during the month (Rs. in lacs) Name of the party A/c No. Amount of TOD TOD allowed on Date of Adjustment Remarks
Observations
Branch Comments
11.
Overdrawings allowed in CC and OD accounts beyond discretionary powers of BM during the month (Rs. in lacs) Name of A/c No. Limit date Excess Date of Balance Remarks the party allowed Amount Adjustm outstanding allowed ent
Observations
Branch Comments
12.
Insurance Expired Name of the Value of Security Borrower
Bal. O./s. as on
Sum assured
Date of Expiry
Page 36 of 55
Observations
Branch Comments
13. Unit visits conducted during the month by the auditor Name of Sanctioning Type of Sanctioned Balance the authority facility Limit outstanding Borrower
Serious Remarks irregularity observed, if any
Observations 14.
Branch Comments
Monitoring of Advances / identification as EAS and SMA List of overdraft and Loan accounts showing overdue interest/installments: (Rs. in lacs) Name of the Sanctioned Date of Interest overdue Installments Amount Borrower Limit Advance Since due since overdue Amount 1 2 3 4 5 6 7
Observations
Branch Comments
14.A Other irregularities in advances (Non -submission of stock statements/ QIS, expired sanction, limitation expired etc.) Name of the Sanctioned Date of Balance Nature of Remarks Borrower Limit Advance outstanding irregularity 1 2 3 4 5 6
Observations
Branch Comments
15.
List of accounts where LC devolved, BG invoked and remaining unadjusted. (Rs. in lacs) Name of the Sanctioned Date of Amount Margin held Likely date of Borrower Limit Devolvement Invoked Adjustment /Devolved 1 2 3 4 5 6
Observations
Branch Comments
15 A. List of accounts where LC devolved, BG expired & not reversed with reasons. Name of the Borrower Sanctioned Date of Limit Devolvement Amount Invoked /Devolved Margin held Likely date of Adjustment
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16.
Recovery Management The following accounts are the fresh slippages to NPA i.e. Nature of Advance 2 Value of Security 3 (Rs. In lacs) Outstanding Date since Balance when NPA 4 5
Name of the account 1
Note: Status Report on NPA a/cs with o/s of Rs.10 lacs and above to be enclosed. Observations Branch Comments 17. Foreign Exchange Business : We certify that we have verified the Packing Credit / Export Bills Purchased / Discounted against LCs / Confirmed Orders etc. during the month, on daily basis to verify that the transactions have taken place in conformity with Banks policies and guidelines and there are no violations of FEMA, Exchange Control Regulations, etc. We further certify that the transactions reflected therein are in order except and to the extent mentioned herein below: Observations Branch Comments 18. Verification of A1,A2 & A3 Forms We certify that we have verified 100% of A1,A2 & A3 Forms for the foreign exchange remittances effected by the branch and they are in order and as per bank/RBI guidelines except as mentioned herein below: Observations Branch Comments
19. Revenue Leakage Checking exercise Checking of monthly interest sheet on advances at the branch has revealed following discrepancies: Observations Branch Comments Comments in respect of revenue leakage detected during the month: (Report to be submitted as per Annexure B) 20. Comments on systems, procedure and adherence by the branch (Comments for dual control of cash and valuables, second checking of transactions, passing of cheques for over Rs. One lac under double signature, generation of day end reports and signing it, generation of exception report and branch managers signature on the same, submission of control returns to RO etc shall be covered) Observations Branch Comments 21. Complaints Complaints Complaints complaints Complaints remarks pending received during redressed during pending at the previous month the month the month end of month
Observations
Branch Comments
22. Recovery of TDS on applicable Term Deposit accounts, Payments to Landlord etc. and payment to Govt.
Contractors /
Page 38 of 55
We certify that we have scrutinized the transactions relating Term deposit accounts, as also payments made by the Branch to contractors/landlord etc and such other transactions wherein TDS would be applicable as per the Income Tax Act, put through by the Branch. We hereby certify that TDS at the prescribed rates has been recovered in all applicable cases in accordance with the laid down policy guidelines and the tax remitted to the appropriate authority within the specified time schedule except and to the extent mentioned below: Observations Branch Comments
23. Service tax recovered and payment to Govt. We certify that we have scrutinized the transactions where service tax is applicable. We hereby certify that service tax at the prescribed rates has been collected in all applicable cases in accordance with the laid down policy guidelines and the tax remitted to the appropriate authority within the specified time schedule except and to the extent mentioned below: Observations Branch Comments
24. Pension Payments, PPF, Collection of Taxes and other Government Business. We certify that we have scrutinized the transactions in Pension Payments, PPF and other Govt. accounts put through by the Branch on a quarterly basis and they are in accordance with the laid down policy guidelines except and to the extent mentioned below: Observations 24. Submission of monthly returns as per Calendar. Observations Branch Comments Branch Comments
25. Whether all day end reports are scrutinized and checked by the authorized officer ? Observations Branch Comments
26. Whether Exceptional reports are scrutinized and checked by the BM ? Observations Branch Comments
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QUARTERLY REPORTING FORMAT (On the letter Head of the Concurrent Auditor) Date: The Regional Head Regional Office ____________ Concurrent Audit Report of Branch : ________ Quarter Ended: ________ We submit herewith our report as above with annexures. The irregularities reported earlier and persisting are detailed hereunder:PENDING ISSUES Report Ref. And date Section No. Details of Irregularity Branch Remarks indicating latest status of rectification
The report on Concurrent Audit was discussed, Rectification to the possible extent is done
Branch Manager Encls: Quarterly Report & Annexures: 1,2, 3, 4, 5, 5, 6, 9, 10 CC with a copy each of the annexure to : 1. 2. The Branch Manager, B/o _______ The Incharge, Regional Inspectorate, ________
Concurrent Auditor
Concurrent Auditor
OBC-Concurrent Audit Policy May-12
Page 40 of 55
REPORT FOR THE QUARTER ENDED: APPENDIX- A A. Branch B. Region C. Category (Large/ VLB/ ELB/Others (Specify) D. If specialized branch, Status E. Name of the Incumbent F. Since when in this branch G. Name & Address of the concurrent Auditors H. Term of present Con. Auditors I. Date of last Risk Based Internal Audit J. Risk Matrix as per last RBIA report as on ____________ K. Trend of Composite Risk (Direction) Business Parameters Previous Quarter As on Particulars 1. Deposits Current Savings Term Deposit(Normal) Term Deposit (DRI) Total Deposits (% budgeted achievement) (% of the term deposits to total deposits) (% of the DRI deposits to total deposits) (% Cost of Deposit) Auditors Comments on budgets & achievements: Budgeted Actual Present Quarter As on Budgeted Actual SSI/ Overseas/ Forex/ Sh/ Ms. Scale: M/s From Business Risk Control Risk Composite Risk Increasing/ Stable/ Decreasing To
Page 41 of 55
2. Advances
Previous Quarter Budget Actual
Present Quarter
Budget
Actual
Priority Sector Non-Priority Sector Total Advances (% Yield of advances) Break-Up of Priority Sector SSI/SE Housing Loan Education Loan Retail Trade Small Business Professional & self employed Other Priority Sector Advances Total Priority Sector Advances Export Credit a) Pre shipment b) Post shipment Total Export Credit Break-Up of Non-Priority Sector Banks Non Banking Financial Companies Government (Central & State) Other PSU Housing Loans (Non-Priority) All others Total Letters of Credit issued Inland L/C Foreign L/C Bank Guarantees issued Inland BG Foreign BG Auditors comment on budget and achievements
Level of NPA Sub Standard Doubtful Loss Assets Total NPAs
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Movement of NPAs Opening NPA Addition during the quarter Reduction during the quarter due to: Upgradation Settlements Actual Recovery Write Off Total Reduction in NPAs Closing NPA Recovery in Write Off accounts Recovery in Recorded Interest Total Recovery during the Quarter (including Write off) Total Recovery during the quarter (excluding Write off) SMA/ EAS Accounts 3. Foreign Exchange Import Turnover Export Turnover Total 4. Profitability Profit (Loss) Productivity Per employee 5. Other Income 6. Sale of Other Products a) Life Insurance b) General Insurance c) Mutual fund 7. ATM/ Debit Cards issued 8. Customer Service Facilities Provided at the branch a) Drinking Water for customers b) Arrangement for physical handicapped c) Proper Sitting arrangements made for customers Whether Customer Service Committee formed and meeting held regularly and minutes of meeting sent to Regional Office (date of last meeting be mentioned) No of Complaints outstanding for over 30 days (attach annexure with details) Whether display of mandatory notices are there in banking hall (for interest rates, BCSBI code, service charges, Ombudsman scheme etc.) 9. Housing Keeping Yes Cash Cash in hand maintained within retention
OBC-Concurrent Audit Policy May-12 Page 43 of 55
Observations
No
Give exception, if any. (Attach separate Annexure if required)
Limit (give number of times it exceeded and the amount) Daily Cash Report is signed by the concerned officials & kept in separate file. Whether Cash is being checked by branch officials not connected with Cash Deptt. on fortnightly basis. Whether Cash has been checked at monthly interval by the Con. Auditors and found correct as per books 1. Clean Note Policy implemented 2. HO guidelines for exchange/issue of coins followed. Whether cash/ transfer/ clearing cheques/ vouchers for amount above Rs 1.00 lac have been passed by two authorized signatories as per guidelines. Bankers balance is maintained within retention limit Guidelines for custody of security forms (cheque books, draft books, deposit receipt books) are followed. Whether loss of security paper has been reported to GM(I&C), HO (proper recording of inventory, movement and consumption and safe custody to be commented)
KYC Measures Whether Letter of thanks has been sent to the account holder for new accounts opened. Whether KYC norms are strictly complied with for all new accounts opened Whether caution has been exercised in all new accounts opened as per guidelines and withdrawals of substantial amount are being monitored Whether KYC norms Annexure A & B has prepared and submitted to RO/ RI/ HO on monthly basis. Whether withdrawals in inoperative accounts have been permitted as per guidelines.(by BM or hall in charge?) Whether CTR (cash transaction report) is generated & scrutinised and signed copy kept on record? Suspicious transactions , if any, are reported to RO/ HO (auditor to give cases identified by them in a separate list)
Revenue Whether vouchers debiting income head are signed by the Incumbent Incharge Whether Interest Paid account above Rs 0.10 lacs, have been passed by two authorized signatories as per guidelines. All expenses of Charges General carry proper authority. Whether the expenses are within the budget/authority vested with BM (exceptions/violations to be reported in a separate list) Whether monthly interest sheets for advances for the period has been checked and signed for correctness (give list of errors identified) Whether payment of interest on deposits has been checked (give list of errors identified) Whether for payment of interest on deposits other than card rate, branch is holding approvals (give list of deposits where higher interest is allowed with/without approval) Locker Rent a) Total Number of Lockers available at the branch b) Total number of lockers lying vacant No c) Locker Rent in arrear (details of locker rent in arrears over one year be given) Auditors comments for controlling expenses and plugging leakages Amt.
Pension Accounts. a) Whether pensioners properly attended and given service to their satisfaction b) Whether reimbursement of pension amount debited to Suspense Pension account is received in time c) Whether disbursement of pension is done in time Housekeeping All Balances tallied with GL Day End & Exceptional Reports as prescribed are generated and filed duly signed by Branch Incumbent Whether all prescribed control returns are submitted to regional office in time
(pending statements to be listed) Whether TDS has been deducted and deposited with Tax Authorities in time on all eligible deposit accounts & out of payments made from Expenses Heads (i.e. Rent & AMC etc.) Whether Service Tax has been collected and deposited with tax authorities in time. Whether vouchers are properly tallied/ stitched, entered in Voucher Register and signed by Daftri/ Hall Incharge and are in the custody of Daftri Whether premises, furnishing, fixtures are well maintained (observation for improvement be given) Whether all Security System is functioning properly & Gun License is valid and contains the names of the guard(s) as retainers. Status of implementation of Ghosh committee and Jilani committee recommendations. Frauds/theft/burglary or attempts for it identified and reported during the quarter (attach list with details) Housekeeping Continued: Previous quarter Number/ Amt. of Suspense Entries outstanding for more than one month (attach annexure with details) Number/ Amt. of Sundry Entries outstanding for more than one month. (attach annexure with details) Clearing Adjustment/ LBC/ MBC entries outstanding for more than one month (attach annexure with details) Un-reconciled/outstanding entries under any other account (attach annexure with details) Debit Present quarter
Credit Suspense Remittance Account Entries outstanding for more than ten days. (attach annexure with details) Bankers account reconciled up to Unreconciled entries over one month (attach annexure with details) IRSA entries outstanding over 7 days (attach annexure with details) No of OBC entries outstanding more than 30 days (attach annexure with details)
CREDIT MANAGEMENT APPENDIX - B Fresh Proposals pending for sanction (at the end of the quarter) PS Pending for over 1 month Pending for over 2 month Pending for over 3 month Pending for over 6 month Comments on delay: BO Powers RO Powers HO Powers PS Othe rs
Others
PS
Others
Previous quarter Pending Renewal/ Review of limits Number of the cases where corrective action has not been taken in the irregularities pointed out by stock auditors and monitoring officer. Number of the cases where BCC has not been prepared and kept with documents in Branch Sanction cases and not submitted to RO in RO/ HO sanction cases Number of accounts (attach list) a) where limits have expired b) where limitation has expired c) where limitation is going to expire in next 6 months Number of accounts a) where insurance has expired or is inadequate b) where insurance is expiring in next three months Number of accounts a) Where securities due for inspection not checked for more than three months in CC accounts and 6 months in PS advances. b) Vehicles over due for inspection c) JRC not obtained for over one month Number of accounts where Search Reports (NEC) have not been obtained from the panel advocates Packing Credit accounts not adjusted within schedule period Outstanding ILC/ FLC where documents received and paid by the Bank but not reimbursed by the borrowers Guarantees (Inland & Foreign) invoked but not paid by the branch/ borrower a) Inland b) Foreign Overdue Export Bills purchased/ discounted/ negotiated under LCs a) Names of the borrowers and amount where bills/ cheques purchased but received back unpaid and pending for recovery
Present quarter
Page 47 of 55
b) Names of the borrowers and amount where bills/ cheques purchased are overdue for more than 30 days from due date. QIS Data overdue for 3 months and over Whether discretionary powers for sanctioned of Loans have diligently been exercised and reported to RO in STM 41, 41A Whether the Branch is frequently resorting to unauthorized business. (Cases not reported to RO should be commented separately) Whether advances made beyond BM powers are reported to RO through STM 41b & 41C for confirmation of action. Details of Units visited by the Concurrent auditors along with Branch officials (attach detailed report on the observations) Whether monthly interest sheets of advances are printed & checked and kept on record duly signed by BM and Loans Incharge Whether rate of interest, terms & conditions on all advances have been correctly fed in the system and updated with latest changes. (Exceptions should be commented separately.) Details of cases where insurance expired/under insurance/not insured Details of quick mortality cases (attach separate sheet giving details of each accounts) NPA accounts (attach separate sheet giving details of each accounts) Accoun t Sanctioni ng authority Details of credit facilitie s DP Outst andi ng Overdue amount & nature of irregularities Asset classifi cation NPA since Detail s of securi ty Limi tati on expi ry dat e R e m ar ks
Special Mention Accounts: (attach separate sheet giving details of each accounts) Account Sanctioning Details authority of credit facilities Date of advance Outsta nding Overdue amount & nature of irregulariti es SMA since Details of securit y Re mar ks
Suit Filed and Decreed Accounts (attach separate sheet giving details of each accounts) Name of account Suit date Suit amount Date of decree Decree amoun t Securities available with value Date execution of decree filed Pres ent statu s Remar ks
Page 48 of 55
Decree execution pending Name of the account Date of decree Decree amount Securities available as per decree Reasons for pending execution Remarks
Remarks of Auditor on NPA/SMA/Suit filed/Decreed accounts
Comments of Branch Manager
Expired L/Cs, BGs outstanding in the books of branch pending reversal LC/BG No. Applicant Beneficiary Amount Date issued Date expire d Reason for not reversi ng Remarks
General Comments of Auditors: (Sharp rise/ fall in deposits /advances, abnormal transactions in staff accounts or any other abnormal happenings be commented upon using extra space if required) Comments on the accounts sanctioned during the quarter: (Proper appraisal, loan documentation, adherence to terms of sanction & compliance of BCC norm etc.) General Comments (Cases where frequent enhancement, clean overdrafts or any other abnormal happenings are noticed be commented upon)
Page 49 of 55
Foreign Exchange Business (Give account wise details in separate sheet wherever required) Overdue Packing Credit Accounts Outstanding under Foreign LC where documents received and paid by the branch but not reimbursed by the borrowers Overdue Export Bills Purchased/ Discounted/ negotiated under LCs A-1, A-2 & R Returns have been verified by the Concurrent Auditors Bill of entry in respect of imports have been verified by the concurrent auditors Forward Exchange Contracts are reported to HO in time Whether R Return submitted to RBI in time Whether XOS statement submitted to RBI in time Whether Interest Subvention has been correctly calculated and claimed Whether ECGC claims have been filed in eligible cases and followed up ( also give details of pending claims) List of serious irregularities observed by the concurrent auditors during the quarter Sl. No Nature of Irregularity
Current Quarter
Since Remedial Steps taken by the when branch persisting
List of all pending irregularities observed by the concurrent auditors Sl. No Details of Irregularities Since BMs comments for Nonwhen Rectification persisting
Report the major/ serious irregularities of various inspection/ audits not rectified. (RBIA, Statutory, RBI, Stock Audit, Loan Review etc) (Use Annexure for details) Check list to assess the level of customer service at the branch (Applicable only for branches conducting Govt. Business)
How long does the delivery of Receipted Challans taken when tendered with Cash What is the time taken for delivery of Receipted Challans if tendered with cheques Whether the branch is issuing paper tokens Whether the date tender and date of delivery of Receipted Challans mentioned in paper token What is time taken for delivery of Receipted Challans when tendered with outstation cheque How long does the branch take to submit the daily scrolls to Govt. Departments When does the branch submit the monthly statement to Govt. Deptt.
30 minutes/ more an hour 3 days/ one week/ more than a week Yes/ No Yes/ No One Week/ More than a week 2 days/ 5 days/ more than a week 1st week of next month/ more than a week/ after 15 days
Page 50 of 55
Revenue leakage detected by the concurrent auditors (to be submitted every quarter to I&C Deptt. Head Office with a copy to Regional Inspectorate & Regional Office Checking of revenue leakage to be done as per the Check List enclosed) Quarter Ended Leakage detected during the quarter Recovered during the quarter Balance Recoverable Total Pendency till date
Rs Rs Rs Rs.
Details of revenue leakage pertaining to previous quarter recovered now Amount Recovered (Rs) Quarter & Year
CHECK LIST NORMS FOR CHECKING S No Head of Account Extent of Checking to be done 100% 100 % 100 % 50 % 100 % 100 % 100 % 100 %
1 2 3 4 5 6 7 8
Income Penal Interest where chargeable Processing Fee/Upfront fee Inspection charges in borrowal accounts Incidental Charges (In all CC/ OD/ Current Accounts) All debits to Income heads Interest subsidy claimed/ received from RBI/ other agencies Interest received on Deposits kept with other banks Locker Rent Year wise position of locker rent received and in arrears (to be shown separately) Expenditure Head Check whether capital & revenue expenditure incurred falls within the powers vested with Branch Incumbent. If not, whether confirmation was sought from appropriate authority( Exceptions be only reported) Telephone/ postage/ telegram expenses be checked
100%
Only where expenditure has shown vide variance over the previous period
Signature of the Auditor
Page 51 of 55
EXTENSION COUNTER
a)
Cash balance at ....................Extension counter amounted to Rs........... before /after commencement of business hours on ..................which was checked and found to be correct.
b) c) d) e) f) g) h) i)
Whether books are balanced periodically and tallied with the GL. Books are maintained as per laid down norms. Reconciliation of extension counter account with main branch account. Whether Manager of parent branch exercise vigilant supervision over the extension counter. Serious deficiencies observed in RO Inspection report. The deficiencies in the loans granted by extension counter are enumerated below. We certify that the deposits held as security are available in the books of the extension counter
It is confirmed that the report has been discussed by the Auditors with the Branch Incumbent before finalization.
Signature of Concurrent Auditor Auditors rubber Stamp
Signature of Branch Incumbent Branch Rubber Stamp
Date:
Date:
Notes: Concurrent Auditors shall incorporate in their report any other point other than the above. Please attach the detailed sheets/ annexure wherever required to highlight details of irregularities etc.
Page 52 of 55
TIME SCHEDULE FOR SUBMISSION OF REPORTS/CERTIFICATES BY CONCURRENT AUDITORS SUBMISSION OF 1ST COPY 2ND & 3RD COPY Branch manager DATE OF SUBMISSION
REPORTS A DAlLY REPORT
Second Man/ daily Hall In charge of the Branch Respective R.O. & Regional inspectorate Immediately detection on
Instances of fraud fraudulent activity **
or GM (I&C), H.O.
B 1
MONTHLY Special Report GM (I&C), H.O. Respective R.O. (& Branches)* Branch Immediate.
Monthly Report
Respective R.O.
within 7 days of succeeding month 10th day of following month.
Certificate on Implementation GM (I&C), H.O. of KYC guidelines and AML norms. Revenue audit reports R.O. & Branch
R.O. & Branch
4 5
Regional inspectorate Regional inspectorate 10th day of following month.
The branch is taking hard copy R.O. & Branch of all day-end reports including exceptional reports and the same are signed by Hall Incharge & the Branch Manager. Print out of CTRs generated R.O. & Branch from system is taken by the branch and the same is signed by Hall Incharge & the Branch Manager. Branch Incumbent/Loans R.O. & Branch Incharge/ Monitoring Officer should visit all the eligible borrowal accounts as per schedule stipulated in bank's Loan Policy. Concurrent Auditors should verify & confirm this and report cases where unit visit is not done as per the Loan Policy circulated vide Circular No. HO/RMD/15/2010-11/389 dated 10.09.2010.
Regional inspectorate
10th day of following month.
Regional inspectorate
10th day of following month.
** Branch may be informed only if he is not a party to the fraudulent activity
Page 53 of 55
C 1
QUARTERLY QUARTERLY REPORT (Sept., Dec., March & Regional June) Inspectorate Certificate for 100% GM (I&C), H.O. verification of Bills of Entry as per format. (for Forex branches only)
R.O. & Branch
latest by 7 th day of succeeding month 1st of month. following
R.O. Branch & IBD, HO
3 Certificate for 100% GM (I&C), H.O. R.O., Branch & IBD, HO 1st of Verification of A1 A2 and month. A3 compliance of FEMA guidelines as per format. (for Forex branches only) Quarterly certificate for GM (Recovery & Regional Office, asset classification Law), H.O. and Accounts DepartmentHO Quarterly certificate for GM (IBD), H.O. Regional Inspectorate & 100% verification of export Regional Office finance and ECGC cover Revenue audit reports Regional Inspectorate & Regional Office Report on working computerised Regional Inspectorate & Regional Office Within 7 days of close of relevant quarter. following
4.
6.
certificate for verification of GM (Accounts), various Govt. & other H.O. securities kept in the safe custody of the branch (wherever kept) (for quarters ending Dec /Mar /June /Sep)
Page 54 of 55
Concurrent Auditors shall certify the following quarterly statements for the quarters ending Mar/Jun/Sep/Dec at the Branch: a. Balance sheet, Profit & Loss Statement. b. Statement showing details of Advances for Capital Adequacy (format REC/OSS/RBI/DSB/2B/118 ) c. Statement of Contingent Liabilities (Format REC/OSS/RBI/DSB/2A/117 ) d. Provision Sheet for Doubtful debts/Substandard debts/Loss Debts. 10 Inventory of SFF, physically available in branch should be verified on half yearly basis (Sept / March) and reconciled with the list of SFF items as per RO records.
Regional R.O. & Branch Latest by 7 th day Inspectorate on half yearly basis (Sept of succeeding on half yearly basis / March) month on half (Sept / March) yearly basis (Sept / March)
Page 55 of 55

Annx-2-Con Audit Policy 2012-13

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OBC Concurrent Audit Policy

POLICY GUIDLEINES FOR CONDUCTING CONCURRENT AUDIT

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

Date Of Signature Of Rectification CA BM

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

Amount of Premium paid to ECGC

Date of Remittance to ECGC

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

(d) (e) (f) (g) (h) (i) (j)

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

xiv) xv) xvi) xvii)

xviii) Proper custody of AOF, Ledgers, Code books/check

Above Rs.1 lac to Rs.5 lac Above Rs.5 lac

Above Rs.1 lac to Rs.10 lac Above Rs.10 lac

Above Rs.10000 to Rs.50000/Above Rs.50000/-

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

vii) viii) ix) 14.8 i)

Must also comment on

OBC Concurrent Audit Policy

xv) xvi) xvii)

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

xi) To verify that up to date interest is levied on Bills

xii) To verify that inward bills for collection should not be

xviii) Monthly declaration under whole

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

STAT 5 STAT 6 STAT 8 STAT 9 STAT 10 8.

OBC Concurrent Audit Policy

ii) iii) iv) v) vi)

vii) viii) ix) x) xi)

xii) xiii) xiv) B i) ii)

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

22. 23. 24. 25.

OBC Concurrent Audit Policy

Expenditure Head. I. Interest paid on a) Saving Bank deposits

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

KYC/ AML POLICY- IMPORTANT GUIDELINES

Updated KYC & AML Policy be referred as available on OBCWEB.

OBC Concurrent Audit Policy

Report Ref. And date

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

OBC Concurrent Audit Policy

7. Transactions in inoperative/dormant accounts: Observation

Insurance Expired Name of the Value of Security Borrower