CHAPTER I

AUDIT OF BANKING COMPANY

INTRODUCTION:The audit of banking companies plays a very important role in India as it
helps to regulate the banking companies in right manner. In audit of

banks

includes various types of audit which are normally carried out in banking
companies such as statutory audit, revenue/income expenditure audit, concurrent
audit, computer and system audit etc. the above audit is mainly conducted by the
banks own staff or external auditor. However, the rules and the regulation relating
to the conduct of various types of audit or inspections differ from a bank to bank
expect the statutory audit for which the RBI guidelines is applicable. In this, more
importance has been given on the overall bank audit system with reference to Axis
Bank. In todays competitive world audit is very much necessary as well as
compulsory , because investor investing decision is depend on that particular
concept if auditor has expressing his view about particular organization is true and
fair then investor can get his ideas about how much he should invest in particular
companies.

WHAT IS AUDITING?
An audit is a systematic and independent examination of books, accounts,
statutory records, documents and vouchers of an organization to ascertain how far
the financial statements as well as non-financial disclosures present a true and fair
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view of the concern. It also attempts to ensure that the books of accounts are
properly maintained by the concern as required by law. Auditing has become such
a ubiquitous phenomenon in the corporate and the public sector that academics
started identifying an "Audit Society". The auditor perceives and recognises the
propositions before him/her for examination, obtains evidence, evaluates the same
and formulates an opinion on the basis of his judgement which is communicated
through his audit report.
Any subject matter may be audited. Audits provide third party assurance to
various stakeholders that the subject matter is free from material misstatement. The
term is most frequently applied to audits of the financial information relating to
a legal person. Other areas which are commonly audited include: secretarial &
compliance audit, internal controls, quality management, project management,
water management, and energy conservation.
As a result of an audit, stakeholders may effectively evaluate and improve the
effectiveness of risk management, control, and the governance process over the
subject matter.
The word audit is derived from a Latin word "audire" which means "to
hear". During the medieval times when manual book-keeping was prevalent,
auditors in Britain used to hear the accounts read out for them and checked that the
organisation's personnel were not negligent or fraudulent.

AXIS BANK:Axis Bank established in 1993 was the first of the new private banks to have begun
operations in 1994 after the Government of India allowed new private banks to be
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established.Axis Bank Ltd. has been promoted by the largest and the best Financial
Institution of the country, UTI. The Bank was set up with a capital of Rs. 115
crore, with UTI contributing Rs. 100 crore, LIC Rs. 7.5 crore and GIC and its
four subsidiaries contributing Rs. 1.5 crore each.Axis Bank is one of the first new
generation private sector banks to have begun operations in 1994. The Bank was
promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI)
(then known as Unit Trust of India),Life Insurance Corporation of India (LIC),
General Insurance Corporation of India (GIC), National Insurance Company Ltd.,
The New India Assurance Company Ltd., The Oriental Insurance Company Ltd.
and United India Insurance Company Ltd. The shareholding of Unit Trust of India
was subsequently transferred to SUUTI, an entity established in 2003.
Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act,
1963, with a view to encourage savings and investment. In December 2002, the
UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the
bifurcation of UTI into 2 entities, UTII and UTIII with effect from 1st February
2003. In accordance with the Act, the Undertaking specified as UTI I has been
transferred and vested in the Administrator of the Specified Undertaking of the
Unit Trust of India (SUUTI), who manages assured return schemes along with
6.75% US64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59
crores.
The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.
Axis Bank entered a deal in November 2010 to buy the investment banking and
equities units of Enam Securities for $456 million. Axis Securities, the equities arm
of Axis Bank, will merge with the investment banking business of Enam
Securities.As per the deal, Enam will demerge its investment banking, institutional
3

equities, retail equities and distribution of financial products, and nonbanking

finance businesses and merge them with Axis Securities.
Services offered by the bank:

Personal Banking

Corporate Banking

NRI Banking

Priority Banking

VBV Online purchases using Credit Card

VBV / MSC Online purchases using Debit Card

Boards of directors:Board of Directors

Chairman

Sanjiv Misra

Managing Director &

CEO

V R Kaundinya, Prasad R Menon, Samir K Barua, Som Mittal, Rohi

Director
Deputy

Shikha Sharma

Bhagat, Usha Sangwan, Srinivasan Vishvanathan

Managing

Director

V Srinivasan

Company Secretary

Girish V Koliyote

Additional Director

Rakesh Makhija, B Babu Rao

Addtnl

Independent

Director
Executive Director

Ketaki Bhagwati
Rajiv Anand, Rajesh Dahiya

Advantage of auditing:-

1. Assurance of true and fair accounts:

Audit provides an assurance to the various users of final accounts such as owners,
management, creditors, lenders, investors, governments etc., that the accounts are
true and fair.
2. True and Fair balance sheet:
The user accounts can be sure that the assets and liabilities shown in the audited
balance sheet show the concern, as it is i.e. neither more nor less.
3. True and fair profit and loss account:
The user can be confident that the audited profit and loss account shows the true
amount of profit or loss as it is i.e. neither more nor less.
4. Tally with books:
The audited final account can be taken to tally with the books of accounts. Thus,
the income-tax officer can start with the figure of audited books profit, make
adjustments and compute the taxable income. An outside user need not go through
the entire books.
5. As per standard accounting and auditing practices:
The audited final accounts follow the standard accounting and auditing principles
laid down by professional bodies. Thus, audited accounts are based on objectives
standard and not on personal whims and fancies of a particular accountant or
auditor.
6. Detection and prevention of errors and frauds:

Audited accounts can be assumed reasonably free from errors and frauds. The
auditor with his expert knowledge would take due care to see that Errors and
frauds are detected so that the accounts shoe a true and fair view.
7. Advice on system, taxation, finance:
The auditor can also advise the client about the accounting system, internal control,
internal check, internal audit, taxation, finances etc.

Limitations of Auditing: An auditor cannot check each and every transaction he has to check only the
selected areas and transaction on a sample basis.
Audit evidence is not conclusive in nature thus confirmation by a debtor is
not conclusive evidence that the amount will be collected. It is said evidence
is rather than conclusive in nature.
An auditor cannot be expected to discover deeply laid frauds usually
involves acts designed to conceal them such as forgery, celibate failure to
record transactions, false explanation and hence are difficult to detect.

 Audit cannot assure the users of account about the future profitability,
prospects or the efficiency of the management.
An auditor has to rely upon expert auditor may have to rely on expert in
related field such as lawyers, engineers, values etc. for estimating
contingent liabilities, valuation of fixed assets etc.
The auditor is required to:
1. Verify the ledger balances in each account with reference to the bank
confirmation certificates and reconciliation statements as at the year-end.
2. Review the reconciliation statements and pay particular attention to the
following:
a. Examine that no debit for charges or credit for interest is outstanding and all
the items which ought to have been taken to revenue for the year have been
so taken. This should be particularly observed when the bills collected etc.,
are credited with net amount and entries for commission, etc., are not made
separately in the statement of account.
b. Examine that no cheque sent or received in clearing is outstanding. As per
the practice prevalent among the banks, any cheques returned unpaid are
accounted for on the same day on which they were sent in clearing or on the
following day.
c. Examine that all bills or outstanding cheques sent for collection and
outstanding as on the closing date have been credited subsequently.
3. Examine the large transactions in inter-bank accounts, particularly towards
the year-end, to ensure that no transactions have been put through for
window-dressing.
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4. Check original deposit receipts in respect of balances in deposit accounts in

addition to confirmation certificates obtained from banks in respect of
outstanding deposits.
5. Check whether these balances are converted into the Indian currency at the
exchange rates prevailing on the balance sheet date and ensure compliance
with AS-11 on Accounting for the Effects of Changes in Foreign Exchange
Rates.

Audit Procedure of axis Bank

Internal Audit/ Information Systems Audit

Many banks instead of having concurrent audit or even in addition to having

concurrent audits may use internal auditing. Internal Auditing is when any
organization, including a bank, constitutes an audit team within its own
organization to cater to its auditing requirements. These internal auditors will visit
branches one by one where and when required and carry out auditing.
Internal Audit may focus on any specified area or cover every aspect of the branch,
depending on its audit programme and requirement; main thing is it is conducted
by the bank itself. However one important thing in internal audit is information
systems audit; information systems audit is a new area gaining prominence in the
last few years. With rapid computerization in banking sector core banking,
ATMs, mobile banking, internet banking, completely computerized banking
functions it becomes necessary to have a periodical review of how these systems
are working. Internal Control audit looks are the information flow, the channels,
the security (of information) etc. It also checks for the workability of new banking
softwares and how it rates on security and access.
Statutory Audit
Statutory Audit is conducted by a Statutory Auditor the word statute means
mandated or compulsorily required by any law or Act; in Banks case it is the
RBIs mandate. Every year around the very last days of March (end of financial
year) and the beginning of April (first two weeks of April) in every branch of
every bank a very rigorous activity is held know as the year end audit or the
statutory audit! This audit is the most important event for a bank as this decides
among other things the NPA. NPA and its provisioning affect the profits of a
bank and hence the Balance Sheet and Profit and Loss Account and finally the
shareholders dividends.
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Thus Statutory Audit is very important. Statutory Auditors are appointed by RBI in
association with the ICAI, to empanel Chartered Accountants for the job. Statutory
Audit does not look at the nitty-grittys of the banking transactions (these are
looked at by concurrent and internal audits); instead they rely on the concurrent
audit reports and test checking to form their opinion. Statutory Audit mainly looks
at the loans and advances, compliance with PSL requirements, CRR, SLR etc. and
other statutory norms compliance as per the latest RBI circulars. Thus, Bank Audit
is an important activity undertaken by internal and external auditors, to ensure no
fraud is being committed the overall aim to ensure fair and just banking practice.

Bank Reporting
The directors of banks are ultimately responsible for the information they present
in annual reports, and for the information on which the auditors, report. Bank
reporting is therefore the starting place of any discussion about the role of bank
auditors. Bank reporting has been criticised for not providing sufficient early
warning of bank failures. Maturity transformation is a key role performed by the
banking system. This makes banks inherently risky as their services involve
holding long-dated assets, in the form of long-term loans, and short-dated
liabilities, in the form of customer deposits. The size of annual reports has
increased significantly over a number of years, both in the quantity and complexity
of information provided in the audited financial statements and in the unaudited
front half of annual reports. Annual reports already provide a significant amount of
information on risks, exposures and business models. In addition significant
information is provided outside annual reports, for example through analyst
presentations, trading updates and Basel 2 Pillar 3 disclosures which are often
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presented separately on bank websites. However, the volume and complexity of

information and the way it is presented has made annual reports less accessible to
non-experts. There has been particular concern that it is difficult to understand risk,
business models or going concern assumptions from reading annual reports.
Presentation of risk information
Increased levels of disclosures are adding complexity to bank reporting. The
stakeholders we interviewed agreed that more concise and easier to interpret risk
disclosures are needed. The concern is not so much about insufficient amounts of
risk information but more about the way it is presented. Reflecting numerous
attempts to add to risk disclosures, risk information is currently often presented in
a piecemeal fashion, making it difficult to see the wood for the trees. This lack of
clarity undermines user confidence in reported financial information. The level of
information banks are providing on risk improved during the financial crisis.
Initiatives such as the development of a draft code for financial reporting
disclosure by the British Bankers Association are likely to help maintain a focus
on the quality of reporting.
A particular issue raised is that relevant risk information is often provided in the
annual report, but due to the way in which it is presented, the relative importance
of different risks is hard to gauge. There is no short statement clearly setting out
key issues for users to consider in order to understand the business. Bank directors
suggested alternative short statements which might help explain the risks to their
business more effectively. While there was agreement on the need for clearer
statements, there were different views on what form those statements might take
and what they would cover. The main suggestions were the inclusion of the
following:
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 the business model and key business risks;

a source and application of capital statement showing which parts of the
business require large amounts of capital;
a detailed going concern statement, including risks and why the directors are
satisfied regarding the banks ability to continue as a going concern; and
benchmarking information on certain areas of activity (for example, loan
ratios) against the market, so as to highlight areas where an aggressive
business model is being followed.
Without developing examples, it is difficult to assess which of the disclosures
proposed above would provide the most useful information over the longer term
and which might provide the best signalling of future problems. Banks could
prepare and publish example statements, or voluntarily include summarised risk
disclosures in their annual reports. Auditors should work with the banking industry
to assist in the design of these statements but this is an area which the industry
should own. A degree of experimentation will be necessary to see which form of
disclosure is the most meaningful for investors.
A concern of investors was that risk statements provided by directors might not tell
the full story, and that they would have more confidence in the statements if they
are reviewed by the auditor. Once new risk statements are developed, auditors
could be asked to provide assurance on them. This could be accomplished by
extending the scope of the statutory audit report or could form a separate assurance
engagement. Auditors should work with banks to develop an appropriate
framework, using the existing assurance framework set out in the International
Auditing and Assurance Standard Boards International Standard on Assurance
Engagements 3000 as a starting point for the provision of such assurance, as the
content of new risk statements is developed. If a better form of risk reporting
emerges and if market demand exists for this reporting to be subject to assurance
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from auditors, these developments should be formalised through changes to the

relevant regulatory requirements.
3.4 Reporting of critical estimates and judgements
One area where investors have said they that they would like more information is
around the sensitivity of critical accounting estimates and judgements.
Professional judgement is at the heart of financial reporting. Although accounting
standards have become increasingly technical, many areas retain the need for
judgement. In particular, one overall test is a subjective judgement over whether
the financial statements provide a true and fair view. Indeed, as the sophistication
and complexity of accounting has increased, there are more areas where estimates
are needed, for example in fair value measurement when there is no active, deep
and liquid market and in estimating future pension liabilities for defined benefit
(final salary) schemes. These estimates may be based upon objective evidence, but
the models and inputs used impact the final measurements. As a result, there will
often be a range of acceptable outcomes that directors may present rather than a
single true answer. The best estimate is a matter of opinion.
Accounting standard-setters have addressed this issue by requiring disclosure of
the critical accounting estimates and judgements in the accounts. Good practice
would be to draw them together in one note to the accounts. These disclosures are
already within the scope of the audit. This is also an area where the industry has
significantly improved its disclosures over the course of the crisis and the British
Bankers Association code referred to above is a further significant step forward. It
is important that these disclosures remain dynamic and are changed each year to
reflect the changing circumstances of each bank and the environment it operates in.
This should be a collaborative exercise between the industry and auditors.
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It also emerged from some of our interviews that critical accounting estimate
disclosures may not be widely read by investors. Banks should therefore consider
whether they give sufficient prominence to these disclosures.
Auditor communication with audit committees
Audit committees play an important role in the governance surrounding the
finalisation of critical judgements, estimates and presentation affecting the
accounts. The primary source of information for audit committees is the executive
management. Good quality reporting from auditors to audit committees can add
context to that and highlight gaps in management reporting.
Auditors have a duty to report matters of significance to those charged with
governance. This normally happens through the audit committee, for whom
auditors typically produce a report. The findings, including key areas of the audit
such as the critical accounting estimates are then discussed between the auditors
and audit committees.
Auditors are expected to highlight in their reports to, and discussions with, audit
committees any concerns or areas where estimates are towards the extreme end of
ranges of acceptable outcomes. However, practice may vary as to how these issues
are reported. Good practice is to use language that makes it clear whether, in the
auditors judgement, individual estimates fall within an acceptable range, whether
there is consistency with estimates made in prior years and if the cumulative effect
of, for example, moving from aggressive to conservative ranges of estimates, or
vice-versa, could have a significant impact. Auditors can also indicate how
comparable the definitions applied in financial statements, for example of
particular types of financial instruments, are with those used elsewhere in the
sector. Armed with this information, audit committees are more effective, for
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example because they are better able to challenge executive directors on the
judgements, estimates and presentation used in the accounts.
In order to make audit committee reporting more consistent, ICAEW will develop
guidance for bank auditors on good practice for reporting to audit committees.

3.5 Presentation of information in annual reports

As financial reporting standards have become increasingly complex, reflecting the
growing complexity of financial markets and business generally, the perceived
focus of preparation of true and fair financial statements may have shifted away
from the big picture towards compliance with the requirements of standards.
Financial reporting standards require various components of information which
must be presented in order to provide a true and fair view in the financial
statements. They do not and are not intended to cover every eventuality nor how
information is put together. Compliance with financial reporting standards is only
one part of providing a true and fair view. The way that the information is
presented and ordered is also important. We encourage banks to continue to seek
further improvements in their reporting.
Directors are already expected to consider the presentation of information in
preparing financial statements as would auditors in providing an opinion on
whether they provide a true and fair view. However, there is no framework for
directors presenting information in the front half of annual reports. Such a
framework could prevent key pieces of information from being lost in a surfeit of
detail.
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Auditors should assist directors in this process by considering more carefully the
ordering and presentation of information in annual reports as a whole. This
assessment could be clearly communicated to audit committees to ensure that the
directors also consider this.
Other sources of information
Annual reports are only one source of information to investors and users of
financial information. Analysts use information presented directly to them by the
company as a major source of information. The material included in analyst
presentations, despite its heavy use, is not subject to any auditor review, and while
it may be provided to auditors, there is no obligation on the company to do this
routinely. Consideration should be given to introducing a requirement for auditors
to review material in analyst presentations similar to the extended auditor
responsibilities over the front-half of annual reports we propose in the Auditor
Reporting section of this report.
3.6 Internal Control of Selected Areas
General
1. The staff and officer of a bank should lift form one position to another
frequently and without prior notice.
2. The work of one person should always be checked by another person in the
normal course of business.
3. All arithmetical accuracy of the book should be proved independently every
day.

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4. All bank form (e.g. books, demand draft book, travellers cheque, etc.)
should be kept in the possession of an officer, and another responsible
officer should occasionally verify the stock of such stationary.
5. The mail should be opened by responsible officers. Signature on all the
letters and advice received from other branches of the bank or its
correspondence should be checked by an officer with signature book.
6. The signature book of the telegraphic codebook should be kept with
responsible officers, used, and seen by authorized officers only.
7. The bank should take out insurance policies against loss and employees
infidelity.
8. The power of officers of different grade should be clearly defined.
Vouching or Auditing of Cash and Bank Transactions
The main objects of vouching or auditing of a cash book:
1.to
2.to
3.to
4.to
What

ensure
ensure

all
that

justify
ensure

both

that

all

the
no

receipts

fraudulent
cash

receipts

payment

book
and

is Voucher and

are

have

and

payments
what

accounted
been

bank

are

properly
is

for
made

statement
recorded.
Vouching?

Voucher: A voucher is a documentary evidence which is used to support a

transaction in a books of account.
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Vouching: The act of establishing authenticity and accuracy of all entries in a

account book is called Vouching.

Some important points when auditing a voucher which an auditor must keep in
mind:
All the vouchers should be consecutively arranged because if all the
vouchers are not consecutively arranged then lots of time will be lost to find
out a specific voucher.
An auditor must pay attention to the dates, amount, name of the party who is
using the voucher and to whom the voucher is issued which must be similar
with the cash book.
Auditors should put special attention to those vouchers which are in the
name of secretary, directors, partner and manager.
Auditors should also check that every voucher is properly issued by
responsible officer.
He should also check the nature of the payment whether it related to
business or not.
He should also check where the payment is posted, in revenue or in capital.

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 He should also pay attention to both amount and word figure.

He also has to make note if further evidence is required for any voucher.
If duplicate voucher for missing voucher is produced then it should be
scrutinized more carefully.
He should also check every voucher whether it is stamped or not if it is over
a certain amount.
An auditor cannot take any help from the staff or client while auditing
vouchers.
He should also check that whether receipted invoice is consider as voucher
or not if not then it must be consider as voucher there is a danger of payment
being made twice.
While check the voucher for insurance, rents, taxes ,etc the auditor should
notice the period because sometimes these payment are made in advance, so
he should check weather proper adjustment is made or not.
Verification of physical cash
The auditor should carry out physical verification of cash at the date of the balance
sheet. However, if this is not feasible, physical verification may be carried out, on a
surprise basis, at any time shortly before or after the date of the balance sheet. In
the latter case, the auditor should examine whether the cash balance shown in the
financial statements reconciles with the results of the physical verification after
taking into account the cash receipts and cash payments between the date of the
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physical verification and the date of the balance sheet. Besides physical
verification at or around the date of the balance sheet, the auditor should also carry
out surprise verification of cash during the year.
All cash balances in the same location should be verified simultaneously. Where
petty cash is maintained by one or more officials, the auditor should advise the
entity to require the officials concerned to deposit the entire petty cash on hand on
the last day with the cashier. The auditor should enquire whether the cashier also
handles cash of sister concerns, staff societies, etc. In such a case, cash pertaining
to them should also be verified at the same time so as to avoid chances of cash
balances of one entity being presented as those of another.
If IOUs (I owe you) or other similar documents are found during physical
verification, the auditor should obtain explanations from a senior official of the
entity as to the reasons for such IOUs/other similar documents remaining pending.
It should also be ensured that such IOUs/other similar documents are not shown as
cash-on-hand.
The quantum of torn or mutilated currency notes should be examined in the context
of the size and nature of business of the entity. The auditor should also examine
whether such currency notes are exchanged within a reasonable time.
If, during the course of the audit, it comes to the attention of the auditor that the
entity is consistently maintaining an unduly large balance of cash-on-hand, he
should carry out surprise verification of cash more frequently to ascertain whether
the actual cash-on-hand agrees with the balances as shown by the books. If the
cash-on-hand is not in agreement with the balance as shown in the books, he
should seek explanations from a senior official of the entity. In case any material
difference is not satisfactorily explained, the auditor should state this fact
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appropriately in his audit report. In any case, he should satisfy himself regarding
the necessity for such large balances having regard to the normal working
requirements of the entity. The entity may also be advised to deposit the whole or
the major part of the cash balance in the bank at reasonable intervals.
Where postdated cheques are on hand on the balance sheet date, the auditor should
verify that they have not been accounted for as collections during the period under
audit.
The auditor should advise the entity to send a letter to all its bankers to, directly
confirm the balances to the auditor. The Appendix to this Guidance Note gives an
illustrative proforma letter of request for confirmation to be used for this purpose.
The request for confirmation should also cover dormant accounts as well as
accounts closed during the year.
The auditor should examine the bank reconciliation statement prepared as on the
last day of the year. He may also examine the reconciliation statements as at other
dates during the year. It should be examined whether (i) cheques issued by the
entity but not presented for payment, and (ii) cheques deposited for collection by
the entity but not credited in the bank account, have been duly debited/credited in
the subsequent period. For this purpose, the bank statements of the relevant period
should be examined. If the cheques issued before the end of the year have not been
presented within a reasonable time, it is possible that the entity might have
prepared the cheques before the end of the year but not delivered them to the
parties concerned. In such a case, the auditor should examine that the entity has
reversed the relevant entries.

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Where the auditor finds that post-dated cheques are issued by the entity, he should
verify that any cheques pertaining to the subsequent period have not been
accounted for as payments during the period under audit.
The auditor should pay special attention to those items in the reconciliation
statements which are outstanding for an unduly long period. The auditor should
ascertain the reasons for such outstanding items from the management. He should
also examine whether any such items require an adjustment/write-off.
The auditor should be alert to the possibility that even though the balance in an
apparently inoperative account may have remained stagnant, transactions may have
taken place in that account during the year.
Where a large number of cheques have been issued/ deposited in the last few days
of the year, and a sizeable proportion of such cheques have subsequently remained
unpaid/ uncleared, this may indicate an intention of understating creditors/debtors
or understating/overstating bank balances. In such a case, it may be appropriate for
the auditor to obtain confirmations from the parties concerned, especially in
respect of cheques involving large amounts. The auditor should also examine
whether a reversal of the relevant entries would be appropriate under the
circumstances.
The procedures discussed in the above should also be considered by the auditor in
cases where a large number of cheques are on hand at the date of the balance sheet
and a sizable proportion of such cheques have subsequently remained undeposited/
uncleared.
In relation to balances/deposits with specific charge on them, or those held under
the requirements of any law, the auditor should examine that suitable disclosures
are made in the financial statements.
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In respect of fixed deposits or any other type of deposits with banks, the relevant
receipts/certificates, duly supported by bank advices, should be examined.
Remittances shown as being in transit should be examined with reference to their
credit in the bank in the subsequent period. Where the auditor finds that such
remittances have not been credited in the subsequent period, he should ascertain
the reasons for the same. He should also examine whether the entity has reversed
the relevant entries in appropriate cases.
The auditor should examine that suitable adjustments are made in respect of
cheques which have become stale as at the close of the year.
Where material amounts are held in bank accounts which are blocked, e.g., in
foreign banks with exchange control restrictions or any banks which are under
moratorium or liquidation, the auditor should examine whether the relevant facts
have been suitably disclosed in the financial statements. He should also examine
whether suitable adjustments on this account have been made in the financial
statements in appropriate cases.
Where the auditor finds that the number of bank accounts maintained by the entity
is disproportionately large in relation to its size, the auditor should exercise greater
care in satisfying himself about the genuineness of banking transactions and
balances.
Examination of Valuation and Disclosure
The auditor should satisfy himself that cash and bank balances have been valued
and disclosed in the financial statements in accordance with recognised accounting
policies and practices and relevant statutory requirements, if any.

24

In this regard, the auditor should examine that following items are not included in
cash and bank balances:
(a) Temporary advances
(b) Stale or dis-honoured cheques
Postage and revenue stamps, if material in amount, may be shown separately
instead of being included under cash and bank balances.
The auditor should also examine that there are suitable disclosures as mentioned in
the above paragraphs in relevant cases.

Other Assets:
This is a very important head in the Bank Balance Sheet. There are two major
heads:
1. Inter branch adjustment and
2. Others - There are other heads under this subhead such as suspense account,
stationery & Stamp account and sundry assets. Carefully scrutinize these accounts
specially the sundry assets a/c. While auditing this head, be forensic in your
attitude.
Deposits:

25

See that debit balance in current accounts is not netted out on the liability side but
are appropriately included under the head ADVANCE. This may increase your
audit fees too if the debit balance is of substantial amount. Inoperative accounts are
a common area of frauds in Banks. See whether the revived accounts are under
proper authority or not. Check the KYC norms on a sample basis.
Contingent Liabilities:
Obtain a certificate from the branch management that all contingent liabilities are
disclosed and that the disclosed contingent liability do not include any
contingencies which are likely to result in a loss and which therefore require
adjustment.
3.6 Long Form Audit Report (LFAR):
The first duty is to collect the information required to be provided in the LFAR
from the Branch Manager duly certified. We sent the questionnaire well in advance
to the branch. So, I hope the information has been furnished to me.
LFAR is a detailed questionnaire, the format of which is designed by RBI and used
since 1985. It was revised in 1992-93 and latest revision was made in the year
2003. This is a separate report to the management. Both LFAR and main Audit
Report should preferably be submitted simultaneously but submission of main
report should not be delayed merely because LFAR is not complete.
There are many points in the LFAR which do not have any special point for
discussion. Rather, I will discuss the points which in my opinion merit a
discussion.
Insurance cover for cash: A bank generally obtains a global insurance policy in
respect of cash and cash in transit. If this policy is available at the branch, the
26

auditor should check the adequacy of insurance cover for cash with reference to the
cash balance generally carried by the branch and not the retention limit. If the
policy is not available at the branch, report that the bank has taken a global
insurance policy regarding cash and cash in transit. Regarding commenting on the
adequacy of the same, well, its your call, how you report it.
Balances with RBI, SBI and other Banks: There are three clauses under this item.
In case any item deserves special attention of the management, the same be
reported here: Persistent defaults by the branch in not following the procedure for
obtaining balance confirmation certificates and/or preparing reconciliation
statements should be reported here.
Clause 5a of LFAR on credit appraisal of Advance accounts (regarding loan
application, renew/review of advances etc.): At the time of audit of advance
accounts, see that document files contain loan applications in appropriate forms.
The exceptions are to be reported here. Also check that accounts are reviewed and
renewed in time. Working capital advances are generally granted for one year at a
time and require renewal if the borrower seeks continuation of facility. Loans
repayable over a period of time in installments are not renewed. However, some
banks have a system of reviewing these loans from time to time primarily with the
objective of risk evaluation. The accounts which are due for renewal and not
renewed should be reported here.
Clause 5 d (ii) of LFAR on regular submission of stock statements: Please dont
give a blanket remark that parties are not submitting stock statements regularly.
Because as per the Master circular of RBI on IRAC, a working capital advance a/c
would be deemed as irregular if the outstanding in the account based on the
drawing power calculated from stock statements are older than three months. A
27

working capital borrowing a/c will become NPA if such irregular drawings are
allowed for a continuous period of 90 days. Hence, imagine the situation and act
accordingly.
Clause 5 d (III) on Stock Audits : (Read page no III 10) of guidance note. The
guidance note on Bank Audit is silent in which cases stock audit reports are to be
obtained. On a reading of the guidance note, it appears that stock audit reports are
to be obtained in the cases of large advance as has been described elsewhere in the
LFAR. The RBI vide its circular dt. 30.05.2002 on willful defaulters have asked all
scheduled commercial banks to introduce system of periodical stock audit in case
of working capital finance. Hence, every Bank fixes a suitable Cut-off Limit
above which all CC a/cs are to obtain stock audit reports .As the Auditor, we are to
first ascertain the cut-off limit for stock audit and then see whether the same has
been carried out by all the eligible cases.
Last point of LFAR ; Comments on any other item : One can give comments on
additional items which are not covered in the LFAR as the LFAR is indicative in
nature , like, KYC compliances, security arrangements, locker, ATM, operations in
dematerialization a/c, risk build audit, BCTT, Service tax, etc.
Observation on comments given in LFAR:
It is noticed that certain comments given in the LFAR is not well defined or vague
in nature. The SCA cannot understand what is actually meant by this remark. For
example: In 30 cases, letter of acknowledgement of debt has not been obtained. By
this comment, The SCA cannot understand, if the account is time barred, what in
case the account is NPA, whether the security will be considered or not. Frequent
overdrawing in accounts, the SCAs do not know whether frequent overdrawing
affects NPA status or not. Creditors are not reduced in calculation of wing power,
28

The SCAs would ask whether reduction in drawing power would affect NPA status.
Hence, it is important to be specific in giving comments in LFAR. Auditors
generally does not give qualificatory audit reports or issue MOC due to
management pressure and instead masquerades it in the LFAR. This does not
absolve him of his responsibilities of certifying the fairness of the accounts.
Lastly, if any adverse remarks are to be reported in LFAR, the auditor should
examine its impact on the main audit report. He should decide whether a
qualification is necessary in the main audit report. It should not, however, be
assumed that every adverse remarks in the LFAR would necessarily result in a
qualification in the main audit report. In deciding whether a qualification in the
main audit report is necessary, the auditor should use his judgement in the facts and
circumstances of the case. But if any adverse remarks are given in the LFAR, the
auditor should give the reasons for the same. Also, where relevant, instances of
situations giving rise to their reservation or adverse remarks should also be given.
Compliance with requirements relating to Statutory Liquidity Ratio:
Section 24 of the Banking regulation Act requires that every Banking Company
shall maintain in India in Cash, Gold or unencumbered approved securities an
amount not less that 25% or such other percentage not exceeding 40% of the total
of its Demand and Time Liabilities in India as on the last Friday of the second
preceding fortnight. This is referred to as Statutory Liquidity Ratio. Previously,
all commercial banks were to maintain a uniform SLR of 25% of their total net
demand and time liabilities but vide circular dt. 03.11.2008, the ratio has been
reduced to 24%.
The RBI has asked all Banks to advise their SCAs to verify the compliance with
SLR requirements on 12 odd dates in different months of a Financial Year not
29

being Fridays. SLR is verified at H.O. level. But SCAs require certificates from
Branch Auditors in this respect.
Suppose out of the 12 dates where SLR would be verified, one date is Feb1, 2008.
Hence the DTL position to be examined will be as on last Friday of the second
preceding fortnight, i.e., Jan, 12, 2008. Hence the branch auditor is required to
verify DTL position as on Jan 12, 2008 and cash position as on Feb 1, 2008. We
are to verify the cash position only as branches normally do not hold Gold or other
securities. Now these 12 odd dates of different months of a financial year are
selected by the SCAs and informed to the Branch Auditors well in advance so as to
enable the branch auditors to draw their audit programme accordingly. Please see
your guidelines for closing returns where these dates are mentioned. So auditors
are required to check:
Cash balance as on 12 non Fridays of different months of a financial year;
DTL position of 12 last Fridays of second preceding fortnights.
Capital Adequacy Ratio:
This area is very important since on the basis of our certificates, Basel II
computation of capital is done and which is subsequently disclosed under Notes
on Accounts to the Balance-Sheet. The term, Capital Adequacy Ratio (CAR) is
used to describe the adequacy of capital resources of a bank in relation to the risks
associated with its operations. Under Basel I, the bank need to maintain equal
capital irrespective of the level of credit risk but under Basel II, credit risk will be
computed separately for each class of customers and accordingly capital
requirements will be calculated. Higher the risk profile, higher will be the need for
capital. From Banks perspective, there is always a cost of capital hence it will try
30

to leverage by maintaining sufficient capital only. In India, The foreign banks and
those Indian Banks which have operations outside India have already migrated to
New Capital Adequacy framework by implementing Basel II w.e.f.31.03.2008,
i.e., last year and in respect of other Banks it will be effective from 31.03.2009 as
per RBI guidelines.
Overview of Basel II: Basel is a place in Switzerland. In 1974, the G-10 countries
formed a committee on banking supervision comprising of central bank governors
of the participating countries. This is not a regulatory body but provides guidelines
and recommendations in the expectation that individual authorities will take steps
to implement them. The first accord was signed in Basel in Switzerland in 1988.
Auditors point of View: Basel II computation on capital adequacy is done at the
head office level based on the data provided by the branches. The statutory Central
Auditors verify the computation of capital adequacy as part of their attest function.
We being Statutory Branch auditors need to verify the data provided by the branch
as one of the certificates we sign at the branch is in regard to this, i.e. Data
required for computation of capital Adequacy. Hence, from auditors point of
view, we need not go into the complexities of capital adequacy computation but we
will definitely pay sometime to the verification of Data required for computation at
H.O. level.
Guidance Note on Audit of Investments:
Investments are assets held by an entity for earning income by way of dividends,
interest and rentals, for capital appreciation, or for other benefits to the investing
entity.3. Investments are classified as 'current investments' and 'long term
investments'. A current investment is an investment that is by its nature readily
31

realisable and is intended to be held for not more than one year the date on which
such investment is made. A long term investment is an investment other than a
current investment.
The following features of investments have an impact on the related auditing
procedures:
(a) Investments constitute a significant portion of the total assets of some entities
like banks, insurance companies, investment companies, trusts, etc. In other cases,
the nature, quantum and type of investments may vary from case to case.
(b) Documentary evidence is generally available for audit verification. A
detailed record of acquisition, disposal, etc., of the investments is usually
maintained.
(c) The market values of investments may keep on fluctuating. While in the case
of some investments, such fluctuations may not be wide, in the case of others, they
may be significant.
(d) Physical location of documents of title to investments may be different from
the one where the acquisition disposal and recording thereof take place.
(e) Many investments are readily marketable or can be converted into cash.
Internal control evaluation:
The auditor should study and evaluate the system of internal control relating to
investments to determine the nature, timing and extent of his other audit
procedures. He should particularly review the following aspects of internal control
relating to investments.5
32

(a) Control over acquisition, accretion and disposal of investments: There should
be proper authority for sanction, acquisition and disposal of investments (including
renunciation of rights). It should also be ensured that investments are made in
accordance with the legal requirements governing the entity as also with its
internal regulations, e.g., the provisions of the articles of association, rules and
regulations, trust deed, etc.
(b) Safeguarding of investments: The investments should be in the name

of the

entity as far as possible. The legal requirements in this behalf, if any, should be
complied with. There should exist a proper system for the safe custody of all scrips
or other documents of title to the investments belonging to the entity.
(c) Controls relating to title to investments: It should be ensured that in cases
where the title does not pass on to the entity immediately on acquisition, the same
is transferred to the entity in due course of time, along with the benefits that might
have accrued since the acquisition of the investments. It should be ensured that
there is no undue time-lag in the execution of various stages of the transactions.
(d) Information controls: These controls should ensure that reliable information is
available for recording acquisitions (including by way of conversion of securities,
right issues or other entitlements, under schemes of amalgamation, acquisition,
etc.), accretions and disposals, and for ascertaining the market values etc. Detailed
records regarding acquisition, disposal etc. of the investments should be
maintained along with proper documentation.
Axis bank audit report:INDEPENDENT AUDITOR'S REPORT

33

To
The Members of Axis Bank Limited
We have audited the internal financial controls over financial reporting of Axis
Bank Limited ("the Bank") as of 31 March, 2016 in conjunction with our audit of
the standalone financial statements of the Bank for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Bank's Management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Bank considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India (the "Guidance
Note"). These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including adherence to the Bank's
policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act,
2013.
Auditor's Responsibility
Our responsibility is to express an opinion on the Bank's internal financial controls
over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note and the Standards on Auditing as specified under Section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
34

financial controls, both applicable to an audit of Internal Financial Controls and,

both issued by the Institute of Chartered Accountants of India. Those Standards
and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained
and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the
adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our audit of internal financial controls over financial
reporting included obtaining an understanding of internal financial controls over
financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on
the assessed risk. The procedures selected depend on the auditor's judgement,
including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the internal financial controls system over
financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Bank's internal financial control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A Bank's internal financial control over
financial reporting includes those policies and procedures that (1) pertain to the
35

maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Bank; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Bank are being made only in accordance
with authorisations of management and directors of the Bank; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorised
acquisition, use, or disposition of the Bank's assets that could have a material effect
on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override
of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Opinion
In our opinion, the Bank has, in all material respects, an adequate internal financial
controls system over financial reporting and such internal financial controls over
financial reporting were operating effectively as at 31 March, 2016, based on the
internal control over financial reporting criteria established by the Bank
considering the essential components of internal control stated in the Guidance
36

Note on Audit of Internal Financial Controls Over Financial Reporting issued by

the Institute of Chartered Accountants of India.

Balance sheet of axis bank

Balance sheet of axis bank as at

Particulars

SOURCES

March16

March15

In cr.

In cr.

476.57

474.10

OF

FUNDS
Share capital
Share

warrants

and 0.00

0.00

outstandings

Total reserve

52,688.34

44,202.41

Shareholders fund

53,164.91

44,676.52

deposits

3,57,967.56
99,226.38

3,22,441.94
79,758.27

Borrowings

37

Other

Liabilities

& 15,108.77

15,055.67

Provisions
TOTAL LIABILITIES
APPLICATION

5,25,467.62

4,61,932.39

OF

FUNDS:
Cash and balance with 22,361.15

19,818.84

Reserve Bank of India

Balances with banks 10,964.29

16,280.19

and money at call and

short notice
Investments

1,22,006.20

1,17,550.21

Advances

3,38,773.72
5,795.54

2,81,083.03

Gross Block

4,497.01

Less : Accumulated 2,479.34

2,083.96

Depreciation
Less : Impairment of

0.00

0.00

Assets
Net Block

3,316.20

2,413.05

38

Lease Adjustment
Capital

Work

0.00

0.00

in 206.97

101.26

Progress
24,685.81

Other Assets

27,839.08

TOTAL ASSETS

5,25,467.62

4,61,932.39

Contingent Liability

6,17,446.36
51,279.47

5,91,174.91

Bills for collection

49,008.69

DIRECTORS' REPORT: 201516

The Board of Directors have the pleasure of presenting the 22nd Annual Report of
the Bank together with the Audited Statement of Accounts, Auditors' Report and
the Report on the business and operations of the Bank for the financial year ended
31s t March 2016.
This year has been a mix of opportunities and challenges for the Indian Banking
sector. Despite the challenges the Bank continues to perform well, by leveraging
upon its branch network and innovative electronic channels, a welldeveloped
retail franchise and a number of key corporate and SME relationships. During the
year, the Bank continued to expand its network, as we believe that both physical
branches and digital channels will coexist to create the superior customer
experiences which continue to remain the corner stone of our vision and strategy.
The Bank's retail businesses grew steadily during the year and there was credible
39

growth of both retail deposits and loans, supported by an expanding network that is
critical to the retail franchise. Our corporate advances portfolio grew higher than
industry growth rates as we continue to find attractive refinancing opportunities for
highly rated corporates that are new relationship additions to the Bank's franchise.
The Bank continued to show a healthy growth in both business and earnings, with
a net profit of Rs.8,223.66 crores for the year ended 31st March 2016, registering a
growth of 11.77% over the net profit of Rs.7,357.82 crores last year. The operating
profit of the Bank increased by 20.31% to Rs.16,103.61 crores from Rs.13,385.44
crores last year. The Bank continued to focus on the quality of growth and
displayed strong growth in key balance sheet parameters for the year ended 31st
March 2016. The total assets increased by 13.75% to Rs.525,468 crores, total
advances increased by 20.52% to Rs.338,774 crores. The total deposits of the Bank
increased by 11.02% to Rs.357,968 crores against Rs.322,442 crores last year.
Savings Bank deposits increased by 19.82% to Rs.105,793 crores, while Current
Account deposits increased by 13. 45% to Rs.63,652 crores and together
constituted 47% of total deposits as compared to 45% last year.
The Bank continued to enhance its shareholder value by delivering healthy
financial return ratios. Basic Earnings Per Share (EPS) was Rs.34.59 compared to
Rs.31.18 last year, while the Diluted Earnings Per Share was Rs.34.40 compared to
Rs.30.85 last year. Return on Equity (RoE) stood at 17.49% compared to 18.57%
last year, and Return on Assets (RoA) stood at 1.72% compared to 1.83% last year.
The Net Interest Margin (NIM) for the year was 3.90% compared to 3.92% last
year. The ratio of Gross NPAs to gross customer assets stood at 1.67%, and Net
NPA ratio (Net NPAs as percentage of net customer assets) was 0.70%. The Bank's
provision coverage stood at 72.27% after considering prudential writeoffs.
40

Statutory Auditors
At the 20th Annual General Meeting of the Shareholders of the Bank held on 27th
June 2014, M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory
Auditors of the Bank (Membership No.301003E), were appointed as the Statutory
Auditors of the Bank to hold office as such from the conclusion of the Twentieth
Annual General Meeting until the conclusion of the Twenty Fourth Annual General
Meeting subject to the approval of the Reserve Bank of India each year, on such
remuneration as may be approved by the ACB.
In terms of the first proviso to Section 139 of the Companies Act, 2013, the
appointment of the Statutory Auditors is required to be placed for ratification at
every Annual General Meeting. Accordingly, the appointment of M/s. S. R.
Batliboi & Co. LLP Chartered Accountants, as Statutory Auditors of the Bank for
the financial year 201617, is placed for ratification by the Shareholders of the
Bank at the 22nd Annual General Meeting.
As recommended by the ACB, the Board of Directors has proposed the ratification
of appointment of M/s. S. R. Batliboi & Co. LLP Chartered Accountants, as
Statutory Auditors of the Bank for the financial year 201617 for the approval of
the Shareholders of the Bank at the 22nd Annual General Meeting. The
Shareholders are requested to ratify the said appointment of the Statutory Auditors
and payment of remuneration, as approved by the ACB.
In this regard, the Bank has received a certificate from the Statutory Auditors to the
effect that the ratification of their appointment, if made, would be in accordance
with the provisions of Section 141 of the Companies Act, 2013.

41

As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory

Auditors have confirmed that they have subjected themselves to the peer review
process of the Institute of Chartered Accountants of India (ICAI) and that they hold
a valid certificate issued by the Peer Review Board of ICAI.
There are no qualifications, reservations or adverse remarks made by M/s. S. R.
Batliboi & Co. LLP Chartered Accountants, Statutory Auditors of the Bank, in
their report.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Bank has appointed M/s. BNP & Associates, Company Secretaries,
Mumbai as the Secretarial Auditor of the Bank to conduct secretarial audit.
The secretarial audit of the Bank has been conducted on a concurrent basis in
respect of the matters as set out in the said Rules and have been provided in the
Secretarial Audit Report for the financial year 201516, which is given as an
annexure to this report.
There are no qualifications, reservations or adverse remarks made by M/s. BNP &
Associates, Company Secretaries, Secretarial Auditor of the Bank in their report.
Significant and Material Order Passed by Regulators or Courts or Tribunals
Impacting the Going Concern Status and Operations of the Bank
During the financial year 201516, no significant or material orders were passed
by any Regulator, Court or Tribunal against the Bank, which could impact its going
concern status and operations.
42

Adequacy of Internal Financial Controls Related to Financial Statements

The Board has inter alia reviewed the adequacy and effectiveness of the Bank's
internal financial controls relating to its financial statements.
The Board has discussed with the Management of the Bank the major financial risk
exposures and the steps taken by it to monitor and control such exposures,
overseen and reviewed the functioning of the Whistle Blower Mechanism (which
is a part of the Bank's Fraud Risk Management Policy) and the findings in respect
of the investigations conducted on frauds, which were material in nature and the
actions taken by the Management in this regard.

Financial Analysis and Conclusion

An effective internal audit function provides independent assurance to the board of

directors and senior management on the quality and effectiveness of a banks
internal control, risk management and governance systems and processes, thereby
helping the board and senior management protect their organisation and its
reputation.
The bank's internal audit function is independent of the audited activities, which
requires the internal audit function to have sufficient standing and authority within
43

the bank, thereby enabling internal auditors to carry out their assignments with
objectivity.
Professional competence, including the knowledge and experience of each internal
auditor and of internal auditors collectively, is essential to the effectiveness of the
banks internal audit function. Internal auditors must act with integrity.

The bank has an internal audit charter that articulates the purpose, standing and
authority of the internal audit function within the bank in a manner that promotes
an effective internal audit function. Every activity (including outsourced activities)
and every entity of the bank should fall within the overall scope of the internal
audit function. The scope of the internal audit functions activities should ensure
adequate coverage of matters of regulatory interest within the audit plan. Each
bank should have a permanent internal audit function, when the bank is within a
banking group or holding company.

44

BIBLIOGRAPHY: profit.ndtv.com Markets Market Dashboard

www.moneycontrol.com MARKETS Banks - Private Sector
www.accountingtools.com/definition-audit-report
smallbusiness.chron.com Accounting & Bookkeeping Audit Reports

Axis Bank Home Loan

Axis Bank offers home loan to the people who want money to purchase a house,
home renovation and home extension etc. The house itself acts as a security to the
loan. There are some features of taking home loan from Axis Bank:

100% top up at home loan rate

Last 12 EMI waiver
Special products - Asha, Saksham

Home Loan Axis

Axis Bank home loan interest rate is the rate which you pay over the loan amount
that you have borrowed from the bank. Home loan interest rates offered by Axis
Bank depends upon MCLR.

45

Fixed rates allow you to borrow loan at a fixed price which wont change in
the whole tenure in case of change in MCLR rate and should be chosen only if
you believe that the rates will not hike in future.
Floating rates changes with a single change in MCLR rate in your loan tenure.
You should go for floating rates if you can take the risk of hike in interest rates.

Axis Bank offers home loan based on 6 Month MCLR rates which is currently 9.15%.

Axis Bank home loan interest rate depends upon

Axis Bank home loan amount: Home loan rate in Axis Bank depends upon
the loan amount you apply for. Higher the loan amount, lesser will be the
interest rate
Company where you work: Axis Bank has a list of companies to which they
lend Home loan. Interest rate will be less if your company is listed
Your Salary: Income helps you in identifying your rate of interest. Axis Bank
interest rate varies with your monthly income. Higher the income, less will the
rate of interest

Axis Bank Home Loan Charges

Axis Bank Home Loan foreclosure charges - These charges are to be
paid in case you want to repay your entire loan amount before the end of tenure
period. Axis Bank allows prepayment of home loan with Nil prepayment charges

Processing Fee - Axis Bank asks for a processing fee of 1.00% of loan
amount with applicable service tax
You can even earn eDGE points on Axis bank home loan

On new home loan:

Loan Disbursal Amount

eDGE Points

Up to Rs. 25 Lakh

500 points

Above Rs. 25 Lakh and up to Rs. 75 Lakh

1,000 points

Above Rs. 75 Lakh

2,000 points

On home loan top-up:

Loan Disbursal Amount

eDGE Points

Up to Rs. 25 Lakh

250 points

Above Rs. 25 Lakh and up to Rs. 75 Lakh

500 points

Above Rs. 75 Lakh

1,000 points

46

Axis Home Loan EMI Calculator

Home Loan EMI of Axis Bank is a fixed amount that you pay each month towards the
repayment of your home loan till the end of tenure

Axis Bank home loan EMI calculator helps you to calculate your monthly EMI
at different rate of interest and also check lowest EMI per lakh on home loan.
You can plan your loan amount according to your monthly repayment
capacity because higher the loan amount, higher will be the EMI
Rate of interest is an important factor which affects your EMI. Higher the
interest rate, higher will be the EMI
Loan tenure matters equally as higher tenure reduces your EMI

What are the benefits of calculating Axis Bank Home Loan

EMI?

EMI calculator of Axis Bank Home Loan helps you to calculate your monthly
EMI at different rate of interest
Axis Bank Home Loan EMI calculator helps you to know your capacity to
repay the loan after maintaining your standard of living
You get a rough idea about your monthly EMI and can plan your monthly
budget accordingly

Axis Home Loan Eligibility Calculator

Home Loan eligibility criteria Axis Bank
Eligibility of House loan in Axis Bank relies upon different factors but the most
important factor is your ability to repay the loan. The main factors on which the
eligibility of an applicant depends are

Age: Age plays an important role to know your eligibility and repayment
capacity. Axis Bank offers Home loan to salaried at the age of 24 to 60 years
and self employed individuals at 24 to 65 years
Income: In case of salaried person, Axis Bank Home Loan eligibility
significantly depends upon the income. Usually bank set minimum levels of
income to apply for house loan. Salaried employee should be in government job
or working with a reputed private company and getting regular salary in bank
account with salary slip, form 16
Job stability and Profession: Job stability is important to improve your
eligibility for Home loan from Axis Bank. In case you are salaried, you must be in
a full time job for at least 2 months. In case you are self-employed, you must be
in current profession or business for at least 5 years and should preferably own
either your office or your place of residence. Minimum turnover and minimum
net income criteria may apply. Business must be registered with at least one
government agency such as service tax, VAT, excise, shops and establishment
registrar. Other than job stability, profession is also an important factor which
47

can affect your Axis Bank eligibility. If you are working with a reputed company,
probability of getting home loan from Axis Bank increases as the income is
considered to be more stable
CIBIL Score: Your past CIBIL history and repayment record of existing loans
and credit cards has direct impact on your Home loan eligibility. If you have a
poor repayment record, then you may not get the loan but on the other side, a
regular repayment record increases your Home loan eligibility
Loan Amount: Axis Bank gives you Home loan depending upon your income.
Axis Bank gives you an amount ranging from Rs. 1,500,000 to Rs. 100,000,000.
To improve chances of approval, apply for a loan amount that you can
comfortably service

Estimated eligibility online by using Axis Bank Home Loan

Eligibility Calculator.
Popular Axis Home Loan Products
Axis offers you different type of loans.
Happy Ending Home Loan
o

The principal benefit of availing happy ending home loan is that you
get your last 12 EMIs waived off by just paying your EMIs regularly. The
minimum tenure to get the benefit needs to be 20 years. You can also part pay
your home loan within 5 years of loan disbursement.

Empower Home Loan

o

Empower home loans are made for self employed class only. If they
maintain a good repayment track with the bank for 24, 36 and 60 months from
the date of loan disbursement then the bank will offer them 3 rate reductions
correspondingly

Asha Home Loan

o

o
o

This type of housing loan is for the customers who want to own their
first house. In this type of loan your monthly income and profession is not any
criteria to avail the loan. The loan is given on the basis of your banking
performance or previous repayment track
You can even borrow Rs. 1 lakh under this scheme
Depending upon the location, your combine income with your spouse
should be 8000 p.m. or 10000 p.m. and you need to pay only 10% of the
property value rest 90% the bank will fund you

Super Saver
o

This type of home loans gives you the option to park additional funds
which will reduce the interest payable on home loan to the level of fund parked
with an ease to withdraw the amount anytime

48

You can apply for a minimum loan amount of Rs. 1 Crore for a tenure of

20 years
o

The bank will also give you services like ATM card, cheque book, phone
banking and internet banking to make the most of it

Axis Bank Floating Rate Home Loans

Axis

Bank

Upto

Rs.

Home

Loan

2,800,000

Floating
-

9.35%

Rs.

2,800,001

7,500,000

9.4%

Rs.

7,500,001

50,000,000

9.4%

Above
with

Rs.

50,000,000
Super

Upto

9.4%

linked

Saver

Rs.

to

Home

6
Loan

2,800,000

Above

Rs.

2,800,001

Above

Rs.

7,500,001

Month

MCLR
Facility

9.7%

7,500,000

9.7%

50,000,000

9.7%

Above Rs. 50,000,000 - 9.7% linked to 6 Month MCLR

Apply Now
Empower
Upto

Home
Rs.

Loans

2,800,000

10.2%

Rs.

2,800,001

5,000,000

10.2%

Rs.

5,000,001

10,000,000

10.2%

Above Rs. 10,000,000 - 10.2% linked to 6 Month MCLR

Asha
Upto

Home

Loans

Rs.

1,000,000

Floating
-

10.15%

Rs.

1,000,001

1,500,000

10.15%

Rs.

1,500,001

2,000,000

10.15%

Above Rs. 2,000,000 - 10.15% linked to 6 Month MCLR

Happy
Upto

Ending

Home

Rs.

2,800,000

Loans
-

9.35%

Rs.

2,800,001

7,500,000

9.4%

Rs.

7,500,001

15,000,000

9.4%

Above Rs. 15,000,000 - 9.4% linked to 6 Month MCLR

Axis Bank Fixed Rate Home Loans

49

Axis

Bank

Upto

Rs.

Home

Loan

2,800,000

Fixed

11.6%

Rs.

2,800,001

7,500,000

11.6%

Rs.

7,500,001

50,000,000

11.6%

Above Rs. 50,000,000 - 11.6% linked to 6 Month MCLR

Asha

Home

Upto

Loans

Rs.

1,000,000

Fixed
-

11.6%

Rs.

1,000,001

1,500,000

11.6%

Rs.

1,500,001

2,000,000

11.6%

Above Rs. 2,000,000 - 11.6% linked to 6 Month MCLR

Axis Bank Home Loan Top up, Transfer
Transfer of Home Loan from another bank to Axis Bank?
Axis Bank offers home loan balance transfer from another bank. This is subject to
your

meeting

other

eligibility

criteria

of

Axis

Bank

You can avail additional top-up home loan from Axis Bank, subject to your eligibility

Housing Loan Axis documents required

Home Loan for Salaried employee Axis Bank documents required
o
o
o
o
o
o

Filled up loan application form

2 Passport Size Photo
ITR of last 2 years
Identity Proof - Passport/ Driving Licence/ Voter ID/ PAN
Residential Address Proof - Leave and License/ Registered Rent
Agreement/ Utility Bill (upto 3 months old), Passport
Income Documents 6 months payslip, 2 years Form 16, 6 months
bank statement showing salary credit and any EMI debit

Home Loan for Self-Employed Axis Bank documents required

o
o
o
o
o
o

Filled up loan application form

2 Passport Size Photo
Identity Proof - Passport/ Driving License/ Voter ID/ PAN
ITR of last 2 years
Residential Address Proof - Leave and License/ Registered Rent
Agreement/ Utility Bill (upto 3 months old), Passport
Business proof such as VAT/ service tax registration, incorporation
details in case of companies, business address proof, profit and loss account and
balance sheets certified by CA, copy of partnership deed and proof of business
existence and business profile
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