Audit of Bank Branch Liability Products and Account Opening Procedures

Audit Type Functional Area Sub Functional Area
Branch Audit LIABILITY PRODUCT FEATURES & Current Deposit (CD) Account
ELIGIBILITY CRITERIA
Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account






Branch Audit LIABILITY PRODUCT FEATURES & PLS Saving Account (Gharana Bachat Account)
Branch Audit LIABILITY PRODUCT FEATURES & MICRO CASH MAXIMISER (MCM) Account
Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account





Branch Audit LIABILITY PRODUCT FEATURES & Umeed Bunyandi Bachat Account
Branch Audit Opening & Maintenance of Account Opening Forms - General Guidelines (Part
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 1)
Accounts 2)
Accounts 2)
Accounts 2)
Accounts 2)
Accounts 2)
Accounts 2)
Accounts 2)
Branch Audit Opening & Maintenance of Staff Account
Accounts
Accounts

Accounts
Accounts

Accounts
Branch Audit Opening & Maintenance of Zero Account

Accounts

Accounts

Accounts
Branch Audit Opening & Maintenance of Dormant Account Re-Activation

Accounts
Accounts

Accounts
Accounts

Accounts
Branch Audit Opening & Maintenance of Block Accounts

Accounts
Branch Audit Opening & Maintenance of Block Accounts

Accounts
Branch Audit Opening & Maintenance of Illiterate Person (Customer)
Accounts

Accounts

Accounts

Accounts

Accounts
Branch Audit Opening & Maintenance of Minor Account

Accounts
Accounts

Accounts

Accounts

Accounts

Accounts

Accounts

Accounts
Branch Audit Opening & Maintenance of Partnership Account
Accounts

Accounts

Accounts
Branch Audit Opening & Maintenance of Opening of Account - Procedures

Accounts

Accounts
Accounts

Accounts

Accounts

Accounts

Accounts

Accounts

Accounts
Accounts

Accounts

Accounts

Accounts

Accounts

Accounts
Accounts
Branch Audit Deceased Account Procedures


Branch Audit Deceased Account Payment to legal heirs of deceased Customers
Branch Audit Deceased Account Payment to legal heirs of deceased Customers
Branch Audit Opening & Maintenance of SS Card Signature Scanning & Verification
Accounts
Accounts
Accounts
Accounts
Accounts
Accounts
Accounts
Accounts
Accounts
Branch Audit KYC/ AML Customer Identification
Branch Audit KYC/ AML Customer Verification



Branch Audit KYC AML Procedures Resident and non resident classification
Branch Audit KYC AML Procedures Prohobited account
Branch Audit KYC AML Procedures Account opened on NADRA token

Branch Audit KYC AML Procedures Risk Assessment

Branch Audit KYC AML Procedures Enhanced Due Diligence
Branch Audit KYC AML Procedures Repayment Account – REPA a/c
Branch Audit KYC AML Procedures Asaan Account
Branch Audit KYC AML Procedures Government Accounts

Branch Audit KYC AML Procedures Third Party Mandate Holder Account (s)
Branch Audit KYC AML Procedures Accounts of visually Impaired / Blind Persons
Branch Audit KYC AML Procedures Micro Saving Accounts

Branch Audit KYC AML Procedures Specialized Collection Accounts

Branch Audit KYC AML Procedures Political Exposed Persons (Public Figure)
HO Level KYC AML Procedures Correspondent Banking Relationship
HO Level KYC AML Procedures Correspondent Banking Relationship
Branch Audit KYC AML Procedures Walk in Customers

Branch Audit KYC AML Procedures Anti Money Laundering - Ongoing Monitoring &
Reporting - Branches
Branch Audit KYC AML Procedures Review of KYC/ AML Frequency

Branch Audit KYC AML Procedures Review of KYC/ AML Frequency
Branch Audit KYC AML Procedures Currency Transaction Reporting (CTR)

Branch Audit KYC AML Procedures Suspicious Transaction Reporting
Branch Audit KYC AML Procedures Record Keeping


Check List Items
1. Check whether CD accounts are opened by
individuals (either singly or jointly) as well
entities i.e. proprietorships concerns,
partnerships firms, Public and Private Limited
companies, Government Organizations,
Corporations, Clubs, Societies, NGOs/ NPOs/
WOs/ VOs/ Charitable Organizations etc.
2. Check whether CD accounts are opened with

minimum initial deposit of Rs. 5/-.
3. Check whether any charges deducted by
system/ branch (manually) on non-maintaining a
minimum balance? Since there is no
requirement for maintaining a minimum
balance, if such charges are deducted by branch
then team should raise the observation.
4. Check whether any profit payable on balances

held in these accounts? Since no profit is payable
on current accounts, if any profit paid by system/
branch (manually) except for TDR then team
should raise the observation.
5. Check whether account opening & closing

charges applied on current accounts? Since no
Account Opening & Closing Charges are
applicable on current accounts, if such charges
deducted then team should raise the
observation.
6. Check whether zakat is applicable on current

account? Since these are non-profit bearing
account, Zakat is not applicable, however, if
zakat is deducted from current account then
team should raise the observation accordingly.
1. Check whether branch ensure only individual

customers (single or joint) are eligible to open
Asaan Account who are New to Bank (NTB) and
are not maintaining any other account with the
bank.
2. Check whether asaan accounts opened with

minimum initial deposit of Rs. 100/-.
4. Check whether any profit payable on balances

held in these accounts? Since no profit is payable
on asaan current accounts, if any profit paid by
system/ branch (manually) except for TDR then
team should raise the observation.

applicable on asaan current accounts, if such
charges deducted then team should raise the
observation.
6. Check whether zakat is applicable on asaan

current account? Since these are non-profit
bearing account, Zakat is not applicable,
however, if zakat is deducted from asaan current
account then team should raise the observation
accordingly.
7. Check the maximum withdrawal (by any

mean) up to Rs.500,000/- are allowed in a
month alongwith maximum credit balance limit
is Rs.500,000/- at any point of time including
TDR amount if issued through Asaan Account.
1. Check whether branch ensure PLS Saving

Accounts are opened by Individuals (Singly or
Jointly) as well entities i.e. proprietorships
concerns, partnerships firms, Public and Private
Limited companies, Government Organizations,
Corporations, Clubs, Societies, NGOs/ NPOs/
WOs/ VOs/ Charitable Organizations etc.
2. Check whether PLS saving accounts opened

with minimum initial deposit of Rs. 5/-.
3. PLS Saving accounts are subject to deduction
of Zakat as per Zakat & Usher Ordinance 1980.
Sahib-e-Nisab to be checked before raising any
observation related to non-deduction/ in-correct
deduction of zakat alongwith CZ-50 form. The
detailed procedures related to zakat have been
covered in relevant operations manual section.
4. Check whether Profit on PLS Saving accounts

are calculated as per following on monthly basis:
5. Since profit payment in PLS Saving Accounts

are subject to deduction of Withholding Tax as
per Government Rules. Team should need to
verify account holder status being filer or non-
filer from system or from FBR website, if
available/ applicable to check correctness of
deduction made by system/ branch (manually)
from deposit account holder account.

1. Check whether branch ensure Micro Cash

Maximizer (MCM) Accounts are opened by
individuals (Singly or Jointly) as well entities i.e.
proprietorships concerns, partnerships firms,
Public and Private Limited companies,
Government Organizations, Corporations, Clubs,
Societies, NGOs/ NPOs/ WOs/ VOs/ Charitable
Organizations etc.
2. Check whether MCM accounts are opened

with minimum initial deposit of Rs. 5/-.
3. MCM accounts are subject to deduction of
Zakat as per Zakat & Usher Ordinance 1980.
4. Check whether Profit on MCM accounts are

calculated as per following:
5. Since profit payment in MCM Accounts are
subject to deduction of Withholding Tax as per
Government Rules. Team should need to verify
account holder status being filer or non-filer
from system or from FBR website, if available/
applicable to check correctness of deduction
made by system/ branch (manually) from
deposit account holder account.

1. Check whether branch ensure only individual

customers (single or joint) are eligible to open
Asaan Account who are New to Bank (NTB) and
are not maintaining any other account with the
bank.
2. Check whether asaan accounts opened with

minimum initial deposit of Rs. 100/-
4. Check whether Profit on Asaan Saving

accounts are calculated as per following on
monthly basis:
applicable on asaan savings accounts, if such
charges deducted then team should raise the
observation.
6. Asaan Saving accounts are subject to

deduction of Zakat as per Zakat & Usher
Ordinance 1980. Sahib-e-Nisab to be checked
before raising any observation related to non-
deduction/ in-correct deduction of zakat
alongwith CZ-50 form. The detailed procedures
related to zakat have been covered in relevant
operations manual section.
7. Check the maximum withdrawal (by any

mean) up to Rs.500,000/- are allowed in a
month alongwith maximum credit balance limit
is Rs.500,000/- at any point of time including
TDR amount if issued through Asaan Account.
1. Check whether accounts are opened as

"Minor Account" after fulfillment of
requirements mentioned in KYC / AML
procedures Manual. Please refer KYC/ AML
procedures section to verify the same.
2. Check whether Profit on UBBA accounts are

calculated as per following on monthly basis:
3. Check whether UBBA accounts opened with

minimum initial deposit of Rs. 100/-
5. Since profit payment in UBBA Accounts are
subject to deduction of Withholding Tax as per
Government Rules. Team should need to verify
account holder status being filer or non-filer
from system or from FBR website, if available/
applicable to check correctness of deduction
made by system/ branch (manually) from
deposit account holder account.
6. UBBA accounts are subject to deduction of

Zakat as per Zakat & Usher Ordinance 1980.
1. Check whether personal accounts are allowed

to be used for charity purposes i.e./collection of
donations? Since personal accounts are not
allowed to be used for charity purposes
i.e./collection of donations, if used, team should
raise observation.
2. Check whether separate AOF is being used for

Asaan accounts.
3. Check whether blank columns/spaces be
clearly marked "VOID" to avoid un-authorized
additions/amendments on CIF, AOF & SS Cards.
4. Check whether alterations / over writings in

the Account Opening Form (AOF) be properly
authenticated by the customer / applicant.
5. Check whether branch ensure to create CIF

IDs of all authorized signatories of an entity to be
linked with the CIF ID of entity. Separate CIF
Form of each authorized signatory will be
obtained for creation of CIF ID. Similarly CIF IDs
of all authorized signatories shall be linked with
entity account.
6. Check whether branch ensure to attach CIF
Form with AOF while a copy of it will be attached
with loan documents if loan is disbursed to same
customer.
7. Check whether branch has ensure to mention

"Filer / Non-Filer" status of the customer while
creating CIF. For marking a customer as "Filer", it
should be ensured that either customer has
furnished a verifiable evidence a copy of which
will be kept in record or status is verified through
FBR SMS verification. However, this status will
further be verified / updated (where required)
once a "Filer List" is obtained from FBR /
updated in Flexcube by CBS / IT Support.
8. Check whether customer's instructions for

operating the account (singly / jointly / either or
survivor etc.) be clearly marked / recorded both
on the account opening form & specimen
signature card, the instructions should be clear
and unambiguous.
9. Check whether printed copy of Terms &

Conditions for Regular and Asaan Accounts be
provided to all customers after obtaining
acknowledgement on AOF. Any person opening
an account is understood to have read, accepted
and agreed all the terms relating to the
operation and maintenance of account.
10. Check whether branch ensure that specimen

signatures of customers be same for all accounts
being maintained with the bank.
11. Check whether branch ensure to obtain

written request from the customer for the
purpose of change in signature at the time of
CNIC renewal along with copy of renewed CNIC.
After verification of renewed CNIC from NADRA,
new specimen signatures will be obtained and
updated in bank record. Request will be kept
with AOF.
12. Check whether branch mention distinctive
account number on AOF and SS card.
13. Check whether branch has ensure that

specimen Signature Card be signed in two (2)
different places / boxes to ensure identical
signature by the account holder.
14. Check whether branch has ensure to keep SS

cards locked in fireproof steel cabinets.
15. Check whether BM authorize entire account

opening including scanning of SS cards.
16. Check whether branch has ensure that no

account is open without initial cash deposit.
17. Check whether branch has ensure that third

party mandate is not allowed for photo account.
18. Check whether branch has ensure to send

letter of thanks to new regular deposit account
holders as a courtesy and to verify customer’s
address. Office copy of the letter should be
attached with account opening form for record.
19. Check whether branch has ensure not to

sent letter of thanks to Asaan Account holders as
per regulatory requirement.
20. Check whether branch has ensure to hold

mail instructions shall not apply on Letter of
Thanks.
21. Check that change in CNIC / identification

number should not be allowed by the branches.
Change in CNIC / identification number if it is
done due to error should be done through
Verisys check / identification document review
and approval from Head Distribution.
22. Check the following related to government

account:
1. Check whether accounts of all existing / new
staff (Permanent & contractual including 3rd
Party contract) be categorized as "Employee" at
CIF Level in FLEXCUBE.
2. Check whether BM conduct review of all staff
accounts on quarterly basis. Also check whether
AOM conduct review of account statement of
BM on quarterly basis.
3. Check BM/AOM will fill out and sign the staff

account review memorandum.
4. Check whether quarterly review completed
within 20 days in the subsequent month.
5. Check that branch has ensure not to use staff

account for facilitating withdrawal of customers.
1. Check whether Accounts showing zero

balance for a continuous period of six months
has been closed.
2. Check whether intimation informing customer

for zero balance in the account since last six
months be sent as per Annexure 3: C3 to his/her
last known address within one month of
completion of six months with a request to
contact branch within three days of receipt of
letter. In case no response is received, the
account should be closed after fifteen days from
issuance of notice.
3. Check whether copy of intimation letter has

been attached with AOF for audit trail purposes.
1. Check whether accounts having no customer

initiated activity in the past two years will be
classified as dormant accounts; system
generated profit transactions will not be
considered customer initiated transaction.
Branches may allow the credit transactions in
dormant account without changing the status to
normal. However all customer initiated debit
transactions or withdrawals should not be
allowed until the account holder requests for
activation and produces a fresh copy of his/her
CNIC/SNIC and branch is satisfied with CDD of
customer.
2. Check whether dormant account be only
activated on the written request of account
holder as per Annexure 5: C3 upon his / her
personal visit to the branch on production of
original documents / Valid CNIC/SNIC etc., copy
of which will be kept by the branch after affixing
original seen stamp. Account shall be re-
classified as active by CPU at H.O after approval
of Branch Manager.
3. Check whether branch ensure that for

recovery of receivable amount from dormant
account, branches shall require to obtain prior
approval from Unit Head Branch Banking
Operations. Proper reason with specific amount
to be recovered should be mentioned while
initiating request for approval. Activation of
account shall be done through CPU. Branches
shall ask assistance from CPU / PMO for
deduction of charges. At day end, account shall
be re-classified as dormant.
4. Check whether branch has ensured that
accounts on which a court attachment order has
been received, shall be identified properly. A
separate file shall be maintained containing all
relevant court orders. Any movement in the
account shall be authorized by a designated
officer of the branch. Furthermore, bank may be
served with a Garnishee or Attachment Order of
a customer’s account either for a specified
amount or an unlimited amount in the account.
If said account is showing debit balance (not due
to over draft facility but due to any other reason)
on the date order is served then no action needs
to be taken by the bank. If account is showing
credit balance (attachable funds in the account)
then specified amount in Garnishee Order or in
absence of adequate attachable funds entire
credit balance in the account should be blocked
mentioning the reason of block. The Bank shall
notify customer about the details of the
Garnishee order and the amount attached after
affecting the order, customer will be advised that
account can be operated freely thereafter since
the Garnishee order does not apply to the
amount credited after the date of the order. For
the purpose of determining ‘Attachable Funds’
available in the account on which a Garnishee
Order has been served, Bank is entitled to
deduct from the credit balance available in the
account any debts which existed at the date of
the order. Cheques payable against “fate
awaited” will also be subjected for attachment.
All customer’s accounts which could be set-off
without notice to the customer can be
combined, however Bank is not entitled to retain
funds to meet a customer’s contingent liability.
The Bank has to pay the amount attached to the
court or to
5. Check the judgment
whether branch creditor, as directed
ensure that for by
activation of joint account, all respective account
holders have in-person appeared at the branch
and jointly requested for activation regardless of
operating instructions.
1. Check whether block has been marked on

account or amount by CPU as per the
notification.
2. Check whether branch ensure that ‘Block’

shall only be removed from the account after
getting such permission from the appropriate
legal authority/SBP. The activity of removal of
block shall be performed by CPU. When the
block is removed, the notice to block the
account along with permission for removal of
block status will be filed with the CPU record.
1. Check that Illiterate customer will not be liable
for cuttings and alterations on cheques, unless
duly authenticated by bank officer.
2. Check that the account of illiterate persons or

account with photos should only be opened
when they visit bank personally and affix their
thumb impressions / signatures on the account
opening forms / documents / cheques etc. in
front of a bank officer or Manager, who will
authorize transactions by identifying the
customer with the photograph.
3. Check that this condition should be expressly

and clearly mentioned under special instructions
in account opening form / cheque book leaves as
the case may be of an illiterate person/photo
account, in the following way and stamped "Self
presentation for encashment of cheque is
required".
4. Check that the cheques of illiterate

persons/photo accounts should not be
accepted / paid if received in clearing
/collection / online if presented by third party.
5. Check that the illiterate persons/ photo

account holders must give instructions in person
for any other type of transaction in the account.
No instruction shall be executed if brought in to
the bank by a third party.
1. Check that an account can also be opened in

the name of minor (person whose age is less
than 18 years); the account can be operated by
minor's natural parent /guardian or legal
guardian. The account must be titled as
(_________ Minor & _________ Guardian).
2. Check that branches shall create separate CIF's
for minor as well as guardian in Flexcube to be
tagged to Minor account. Guardian's CIF shall be
tagged primary CIF and Flexcube will also
consider the transactional threshold given in
guardian's CIF for monitoring of Transactions.
3. Check that branches should confirm the

beneficial ownership of funds being deposited
into minor account.
4. Check that when a minor becomes adult or

attains majority (18 years of age) and wants to
operate the account independently (when the
account has not been opened under the court
orders), the consent of the guardian / court
order will be required to close the minor account
and a new/separate account will be opened of
the individual who has attained majority.
5. Check that if the court has nominated a

guardian for opening of account with minor, the
same can be converted into regular account of a
major upon production of court order.
6. To check that in case of death of a guardian,

new guardian will be appointed by the court.
Preferably the old account is to be closed and
the new guardian is asked to open a fresh
account of minor.
7. Check that in case of death of minor, the

account will be marked as "Deceased" and
amount will be paid as per court order.
8. Check that whether branches ensure to

exercise necessary care in the operation of
Minor accounts that it should always contain a
credit balance, as Bank cannot take any legal
action against the minor if by any reason over
draft arise in the account and is not repaid by
the minor. Credit facility should not be extended
to a minor’s account.
1. Check that operation in a partnership account
will be immediately ceased / blocked when the
partnership firm stands dissolved in terms of the
agreement either by death, or due to insolvency
of a partner. The account should therefore, be
closed and a new account in place thereof
should be opened with the remaining partners.
2. Check that in the case of retirement or

admission of a new partner, the existing account
should be closed and a new account should be
opened subject to an express and clear provision
in the Partnership deed / agreement, insolvency
of a partner will result in the dissolution of the
firm. Credit balance lying in the Firms' Account
should be paid to the solvent partners.
3. Check that in case of Society / Club /

Association accounts if one of the office bearers
who operates the account of the society / club
dies or resigns, all operations in the account
should be stopped forthwith, till the receipt of a
fresh resolution passed by the Managing
Committee determining the method of its
operation in future and delegation of powers to
the new office bearers. A resolution to the above
effect shall be signed by both the outgoing and
incoming managing committee.
1. Check whether BBO/BOM will take NADRA

Verisys from concerned staff based at Regional /
Area Offices on same day.
2. Check that if BOM is not satisfied with the

information provided, discrepancies appear in
documents submitted by potential customer or
his/her name is appeared in UN Sanction /
Negative List, the matter should be referred to
Branch Manager and customer should be
tactfully declined for opening an account.
3. Check that Branch Manager should ensure
that initial deposit (initial cash deposit) is
received and credited after opening of account.
4. Check that Branch Operations Manager has

ensure all the details are inserted in the CIF
creation and account opening module of
Flexcube, i.e. basic information, address, contact
details, profession etc.
5. Check that customer's specimen signatures

shall preferably be scanned on the same date
and signatures to be authorized by BM. However
considering the account opening volume in
disbursement days, the scanning time may be
extended to 7 days provided that before making
payments, all signatures to be verified with the
specimen signature card. Scanning date should
be mentioned on SSC at given space.
6. Check that Branch Operations Manager has

ensure final review of AOF, SS card, CIF Form and
will affix required stamps (i.e. Signature, LTI / RTI
Admitted and Signature, LTI / RTI Verified) on the
relevant spaces, ensure all columns are properly
filled and other non-applicable columns are
marked ‘VOID’.
7. Check that Letter of Thanks (other than Asaan

Accounts) shall be generated from Flexcube by
Branch Operations Manager duly signed by
Branch Manager and dispatched on customer's
mailing address. BM/BOM should ensure that
the Letter of Thanks is dispatched on same day
of account opening.
8. Check that Phone verifications shall be done

by Branch Manager for Asaan Account.
9. Check that CIF and Account opening forms

shall be filed in the account opening file/folder
date wise in chronological order.
10. Check that account opening files shall be
kept in fire proof cabinet / vault under dual
control of BOM/Teller, access to account opening
files shall be restricted to authorized person only.
11. Check that all signatures on SS Card have

been properly admitted and blank spaces have
been marked VOID.
12. Check that all Account Opening Forms and

Specimen signature cards are kept locked in fire
proof cabinets overnight.
13. Check that branch has ensure due care

exercised while exercising opening a corporate
account with high volume of expected turnover.
14. Check that all minors accounts are opened

with their parents/guardians with signature
authority to parents or guardians only.
15. Check that separate CIF Forms are filled

providing necessary details of minor.
16. Check that all third party operations in
accounts have been authorized by mandate on
our prescribed format Annexure 6-C3 signed by
all the account holders.
1. Check that BBO / BOM shall mark the account

“Deceased” in Flexcube, when such intimation
(intimation letter along with death certificate
from the legal heirs) is received by the bank and
shall affix stamp on account opening form,
specimen signature card & other related
documents. After the confirmation of
information regarding death of a customer, all
withdrawals from his/her account should be
stopped.
2. Check that bank shall exercise caution while

honoring any cheque signed by the customer
unless it is signed by the customer in his official
capacity as an authorized signatory of a
company etc. (in such cases the bank shall
obtain written confirmation from the company
authorizing the payment).
3. Check that all funds received for credit to
account may be credited subject to local laws
and regulations except for the credits that
should be ceased on the death of a customer i.e.
pensions etc.
4. Check that in all deceased accounts, bank

should obtain death certificate. The funds in the
deceased account shall be released to the legal
heirs only after obtaining the necessary
documentation mentioned in "Payment to Legal
Heirs of Deceased Customer" section. Branch
should ensure all the necessary documentation
has been obtained before the funds are
released.
5. Check that no Succession Certificate will be

obtained from the heirs if the balance in
deceased account is below Rs. 50,000/-.
6. Check that bonafides of the Succession

Certificate submitted should be verified from the
relevant court records prior to disbursement of
funds. If Succession Certification is issued by
High Court, all correspondence for verification of
succession certificate should be addressed to
Assistant Registrar, Executive & Miscellaneous
Branch of High Court.
7. Check that deceased account will be closed

after the payment is made to the legal heirs.
8. Check that in case where third party power of

attorney / mandate were authorized to operate
the account, bank should immediately cancel /
terminate the POA granted by the deceased.
9. Check that the cheques presented after the

death of the deceased if maintaining individual
account singly, will not be honored if the fact of
his/her death is within the knowledge of the
branch.
10. Check that in the event of death of any one
or more of the joint account holders, where the
credit balance in a joint account is payable either
to any one or more of the account holders or
survivors of them; in the absence of a contract to
the contrary, the credit balance will become
payable to the survivor(s) without referring to
the legal heirs of the deceased person or
persons. In all other cases, the credit balance will
be payable to the legal heirs of the deceased
account holder(s) along with the remaining
account holder(s) as per bank's procedure.
1. Check that BM authorize the payment after

ensuring completion of all the required
documents.
2. Check that the payment shall only be made

through Banker's Cheque/Payee Account Only
cheque of correspondent bank in favor of legal
heirs of deceased. No charges shall be recovered
from account against issuance of Banker's
Cheque / Correspondent Account Cheque.
1. Check that whether branch has ensure that

signature scanning, uploading and subsequent
authorization by BM are being carried out under
strict supervision to avoid scanning of any
unauthorized signature into the Flexcube.
2. Check that after approval of AOF / S.S Card

from Branch Manager, specimen signature
should be scanned / uploaded in Flexcube
preferably on same day. However this process
may be extended to 7 days during the course of
disbursements provided that all payments to be
made after verification of signatures from S.S.
Cards.
3. Check that BBO/BOM shall scan the signature,

after correct scanning / uploading, sign off the
specimen signature card at the specified space
at the bottom of the card reading "Signature
Scanned" and also mention the scanning date.
4. Check that the Branch Manager after viewing
the scanned signature shall the S.S Card
uploading. Ensure that after approval of AOF /
S.S Card from Branch Manager, specimen
signature should be scanned / uploaded in
Flexcube within 7 days.
6. Check that whether branch has ensure that

signatures have been added, scanned and
attached with the after approval of BM and
similarly deletion of signatures have been
authorized by BM.
7. Check whether request application and all

related documents are being filed along with
Account Opening Form.
8. Check that upon receipt of customer's

cheque / request, the designated officer will gain
access to the specimen signature by inputting
the customer's CIF / account number using
enquiry module of Flexcube.
9. Check that signature verification will be done

by comparing the signature appearing in
Flexcube with the signature available on
cheque / request letter.
10. Check that only designated officers are

authorized to verify signatures on instruments /
request as per authorized limits assigned to
them.
1. Check that branches have obtain copies (any

one) of Computerized National Identity Card
(CNIC), Passport, National Identity Card for
Overseas Pakistanis (NICOP), Pakistan Origin
Card (POC) or National Alien Registration
Authority (NARA) Card before opening an
account. Copies obtained must be marked with
original seen stamp.
1. Check whether for each & every account;

BOI / BM are obtaining NADRA verification of the
CNIC, SNIC, NICOP, NARA etc.
2. Ensure that in case of NICOP an undertaking

to confirm the resident status of the customer is
also required through Annexure - E.
3. Ensure that in exceptional circumstances,
where it is essential to establish banking
relationship without NADRA verification, it may
be deferred for five and three working days for
Regular and Asaan accounts, respectively. Status
of such accounts will be marked as “Debit
Blocked” till the receiving of NADRA verification.
Debit transactions shall be blocked in the system
and Cheque Book shall not be issued. In case of
negative verification, such accounts will be
closed with the approval of AOM. Available
balance will be returned to customer through
Counter cheque / Banker cheque. No charges
will be recovered from the customer.
4. Ensure that if NADRA Verisys reflects the

status as “requires further verification”, CNIC of
blood relative of the customers for further
verification must be attached.
5. Ensure that banking relationship shall not be

established / maintained in case NADRA Verisys
shows status as suspected, mismatch of expiry
date, customer holds more than one CNIC. Only
those Identity documents will be accepted
where contents are 100% verified from NADRA
verisys. Further, BOI/BM shall forward the
complete details of suspected or fake Identity
documents with minimum information like CNIC
number, Name, date of birth, expiry date, etc. to
Compliance Department via email, fax, surface
mail etc.
6. Ensure that for joint accounts, the identity of

all account holders must be established through
NADRA verification.
7. Ensure that any change of address of the

account holder(s) must be notified directly by
the account holder(s) until or unless power of
attorney authorizes to do so.
8. Enusre that following principals should be

followed for signature/thump impression
verification/admission:
a) Illiterate customer (Account with thump
impression) – Individual & Joint: "Account will be
“Photo Account” only. Customer has to visit
branch in person for transaction".
b) If customer is illiterate by qualification but

somehow can provide signatures: "Vernacular
indemnity is required as per Annexure - B will be
applicable".
c) Literate customer (Customer with steady

signatures): "No indemnity is required".
d) Customer with shaky/ non-steady/ infirm
signatures whether in Urdu or English or Any
other language: "If customer's signature is not
steady he should furnish vernacular indemnity
whether it is according to CNIC or not".
e) Customer having signature on CNIC but

provide thump impression for account opening
and other transactions: "In this case account will
be a photo account and in person transaction
will be allowed only".
f) Customer having thump impression on CNIC

but provide signature for account opening and
other transactions: "Signature is different from
CNIC therefore customer should furnish
signature differ indemnity form as per Annexure
- C"
g) Customer do not contain photograph on CNIC:

"Account will be opened as “Photo account”
only. Further customers will provide copy of
CNIC & photos attested by Gazette officer
/Nazim/Administrator/Bank officer for account
opening purpose. Customer has to visit branch in
person for transaction."
9. Ensure that in order to meet the FATCA

requirement (where applicable) branch shall also
obtain the relevant documents & undertakings
from the customer (as per the directions given
by Head Office from time to time).
10. Ensure that before opening of any type of
new accounts whether individual or company,
Branches will be required to search / screen out
the UN Sanction List with the name of new
account holders / company's name including all
authorized signatories of company. In case of no
match, account can be opened. However, in the
event, where name is matched during 1st level
screening, the 2nd level screening should be
done by searching the CNIC Number, Date of
Birth, and if 2nd level searching result does not
match then account can be opened or vice versa.
The search result should specifically be
mentioned i.e. matched Yes or No
11. Ensure that updated list for UN Sanction

should be available on BOls /BMs desktop.
Updated list should be replaced as & when
collected from Head office.
12. Ensure that before opening of account;

Branches will also be required to search / screen
out customer from any negative list sent to them
by Banking Operations department from time to
time. However branches shall ensure
confidentiality of such data/list provided by
Head Office.
13. Ensure that for record purposes, Branches

will have to put a rubber stamp (preferably) on
account opening form as a confirmation of
checking the UNSC & Negative list. After
checking, BM & BOI will put date & sign along
with additional remarks if any.
1. Ensure that customer shall be asked to bring

original documents / passports etc. photocopies
shall be retained in the bank record with original
seen stamp.
1. Enusre that branches are not allowed to open

accounts
1. Ensure that customers who have applied for
new CNIC, first time in their life are not allowed
to open account on the basis of NADRA token
due to unavailable of NADRA verisys.
2. Ensure that in case of expired CNIC, account
are opened on the basis of copy of expired CNIC
& NADRA receipt / token and subject to the
condition that BOI/BM will follow up and has
obtained a copy of renewed CNIC from the
customer within 3 months of the account
opening. In such cases, concerned officer will
have to enter 3 month date of expiry from the
date of account opening into the CIF.
3. Ensure that name appearing on token should

exactly match with the name as per expired
CNIC.
4. Ensure that BOI/BM will prepare Annexure - D

for the purpose of tracking accounts opened on
NADRA token and will maintain a separate file
and review it frequently to obtain copy of CNIC.
5. Ensure that BOI will update the customer

record (CNIC expiry Date) in system upon
receiving of CNIC within 3 months from the date
of account opening. If in case customer doesn‟t
cooperate and provide new CNIC copy branch
shall obtain information from NADRA verisys. If
NADRA verisys report is suspicious, account shall
be marked blocked and closed as per process. If
NADRA verification found in order, BOI/BM shall
update system with new expiry date. However,
customer should be followed up till submission
of CNIC copy.
1. check whether branch is taking prior approval

from Head Banking Operations & review of
Compliance department for opening of High Risk
as mentioned under category “VIII” of Risk
Assessment Grid (also mentioned above)
1. Check whether branch is conducting
enhanced due diligence while establishing
relationship with NGOs (NonGovernmental
Organizations) / NPOs (Not-for-Profit
Organizations), Charitable Institutions etc. to
ensure that these accounts are used for
legitimate purposes only and the transactions
are commensurate with the stated objectives
and purposes. EDD will be conducted in
following circumstances.
1. Check whether branches are closing repa

account of customer who have opened normal
account in the bank..
2. Ensure that issuance of cheque book / loose

cheques to such customers (REPA Account
Holders) are strictly restricted.
3. Check that banches are opening REPA

accounts (without additional requirement of
AOF) which are basically used only for the
purpose of collection of loan where regular
account of the customer is not available. REPA
accounts can be opened as per the loan
disbursement/collection strategy devised by
Head Office from time to time.
1. Check whether branches are opening

accounts (by the permanent employee/staff) by
visiting customers places e.g. factories,
organizations, universities/ colleges, residences
(including place of G2P beneficiaries) etc. For
this purpose:
1. Ensure that branches are not opening

Government accounts in the personal names of
individuals
2. Ensure that government account are opened

on production of special resolution/authority
from the concerned department duly endorsed
by the Ministry of Finance (MoF) or Finance
Department of the concerned (Provincial,
Federal etc) Government. However, this
requirement is not applicable on institutions
which do not fall under the purview of MoF.
3. Check whether all Government accounts are
opened subject to review of Compliance
department & approval from Head Banking
Operations..
4. Check whether BOI/BM ensure that

Government accounts are operated by the
designated officer(s) only.
1. In case Account holder has granted a mandate

to 3rd party (another person individual or
corporate) to operate an account on his / her
behalf for the purpose mentioned in KYC
information at the time of account opening.
Ensure that branch has verified the relationship
between account holder(s) and the mandate
holder(s) along with the reasons for the
mandate.
2. Check whether NADRA verysis has been

obtained for customer and mandate holder.
3. Check whether branches has ensure all KYC

requirements have been completed & all
relevant documents have been obtained.
4. Ensure that third party Mandate will

automatically revoke by death, bankruptcy or
insanity of either of any of the account holders.
1. Check that visually impaired / blind persons

(literate & illiterate) are allowed to open &
operate account jointly preferably with visually
literate person after completion of all documents
/ formalities as per laid down policy including
KYC.
2. Ensure that these accounts will not be

operated under "Either or Survivor" basis but
will be "Jointly" operated.
3. Ensure that branches shall not equate literate

visually impaired / blind persons with illiterate
customers.
4. Ensure that before opening of account, Branch

Manager / BOI shall inform the visually
impaired/ blind customer of his / her rights and
obligations.
5. Ensure that before establishing banking
relationship/ opening of account with visually
impaired/blind persons, branches must explain
the terms & conditions along with possible risk
involved in operation of account.
6. CHeck that if visually impaired / blind

customers need to complete a form, deposit slip,
cheque etc. branch staff member preferably
Branch Manager shall read out the questions;
and write down / fill the information on behalf
of customer in presence of both joint account
holders.
7. Ensure that these accounts shall be jointly

operated; all banking transactions including cash
withdrawal / deposit will always be executed
jointly in presence of bank officials preferably
branch manager/BOI who will witness the
transaction by signing off the respective
documents.
8. CHeck that branches shall clearly mark on the

Account Opening Form, Cheque Book &
signature Card of all such customers as "Visually
Impaired / Blind Person Account"
9. ENsure that when visually impaired blind

customers leave the branch premises, branch
staff shall escort them and ensure that they have
picked up all of their belongings.
1. Ensure that these are privileged savings

accounts offered only to low income and poor
persons who are traditionally excluded from
formal financial system. These accounts can be
opened after establishing identity of customer
only, and upon approval of the branch manager.
Balance limits for such accounts shall, however,
not exceed Rs. 100,000.
2. Ensure that branches are encouraging women
in remote areas to open accounts for saving and
other purposes. If women in remote areas do
not possess identity cards, branches shall guide
them for obtaining their own Computerized
National identity Cards (CNIC). Meanwhile,
branches may open their micro-saving accounts,
on the basis of attested copy of CNIC of her
father/husband, for six months only. Branches
shall also obtain any documents related to
account holder e.g., Nikah Nama, Birth
Certificate, Driving License, Educational Degree/
Certificate, Pension Book or Insurance Certificate
to substantiate true identification.
3. Check that BM will take extra measure to

open such accounts whereby BM are his/her
designated officer shall verify the given address
and beneficial ownership of the customer.
4. Check whether system Reports are develop to

monitor accounts opened on the basis of
attested copy of CNIC of her father/husband, for
six months only.
5. Check that branches shall also ensure to

obtain copy of CNIC/SNIC within Six months
from the date of account opening.
6. Ensure that In case customer did not provide

copy of CNIC/SNIC the account shall be marked
debit block.
1. Check that a Company (Partnership or Joint

Stock) may ask for the services of collection
accounts at different locations.
2. Ensure that all collection accounts are non-

checking account, and no cheque will be issued
for collection account.
3. Check that funds shall be transferred to main

account via on-line on periodic basis as advised
by the customer through standing instructions.
No cheque is required from the customer for
fund transfers where customer has given
standing instructions.
4. Ensure that KYC will be checked as per
standard procedure. If any abnormality found,
same shall be investigated and communicated to
main branch for onward contacting the
customer. After customer update, the main
branch will communicate / update the respective
branch (es) accordingly.
2. Check that above will also includes any

prescribed family member and associated
person of such as PEP. These are also called
connected PEP. Close family member which
include spouse, children, parents, siblings and
may include other blood relatives and relatives
by marriage. PEP will continue to be identified as
PEP even through the individual no longer holds
the position which basically means that once
PEP, always PEP, therefore a customer who has
previously held prominent public function but no
longer holding prominent public function will
continue to be classified as a PEP for the
duration of the customer‟s life not matter how
long the client has left the prominent public
function.
3. Ensure that a customer who held a prominent

public function but is no longer holding a
prominent public function at the time of
entering into relationship with the bank must
still be classified as PEP. Government official of
Grade 20 and above must be reviewed against
their possibility of being PEP.
4. Ensure that in case of account of connected

PEP, additional information will also be obtained
from the customer BM shall conduct EDD by
using Annexure G II.
5. Ensure that before opening of PEPs accounts;

approval of Head Banking Operations and review
of account documentations by Compliance
Department is mandatory.
6. Check that in case, existing customer becomes
holder of public or high profile position, EDD
shall be performed by branch as per given
process and record shall be updated accordingly
with the approval of Head Banking Operations
and review by Compliance Department.
7. Ensure that appropriate measures should be

taken to obtain the details of source of wealth or
beneficial ownership of funds as per the
Annexure G.II.
1. Check that before establishing any such

relationship (correspondent banking), all
regulatory and legal requirements (amended
from time to time) shall be complied with. In
addition to the enhanced due diligence, BOI/BM
at branch level where Head Banking Operations
at HO level shall take the following measures
before establishing correspondence banking
relationship:
2. ENsure that where the cross-border banking

services involve a payable-through account, the
correspondent bank shall be satisfied that:
1. Ensure that branches shall obtain copy of CNIC

(regardless of threshold) for online
deposits/fund transfers conducted by all walk-in-
customer;
2. Ensure that branches shall obtain CNIC from

walk-in customers conducting cash transactions
above Rupees one million whether carried out in
a single operation or in multiple operations that
appears to be linked;
3. Check that BOI shall ensure the filling of “Walk

in Customer Form” as given in Banking
operational Manual retaining copy of valid CNIC
(with original seen stamp) and confirmation of
source of funds for all walk in transactions.
4. Ensure that in case of requests for multiple
cash remittance by the same walk-in-customer,
reasonable assurance shall be obtained by BOI to
assess whether there are any reasons of
suspicion. In case of suspicion, BOI/BM shall
refuse the transaction.
1. Ensure that branches shall keep on conducting

customer due diligence at periodic intervals
mentioned below or on significant occasions
throughout the business relationship, e.g.;
2. Check that whether BOI/BM monitored

transactions of all customers on an ongoing basis
to ensure that the transactions are consistent
with the customer‟s profile and information
provided at the time of account opening like
source of income, business details, transaction
thresholds etc.
3. Ensure that branch will not allow the use of

personal account for large number of business
transactions, except proprietorships, small
businesses and professions where constituent
documents are available and the banks is
satisfied with KYC profile of the account holder.
4. Ensure that expected turnover of the

individual account keeping in view financial
status, nature of business, purpose of
relationship etc. shall be matched with KYC
profile by branch.
5. Ensure that on daily basis BOI/BM shall extract
system based report (KYC/AML report) including
cash based transactions, internal fund transfer,
online transactions, inward/outward clearing
transactions, Banker cheques/DDs/POs of Rs
500,000/- or above and reviews the same for
Enhance Due Diligence Purpose. Further, branch
may also obtain documentary evidence if
required to know the genuineness of
transactions. KYC/AML report is available in CBS
where transactions can be traced & reviewed.
Report to be signed by BOI/BM and to be kept in
separate file for record purpose.
6. Ensure that BOI/BM will update the KYC

information of the customer where transactions
are not in line with the customer‟s profile and
risk category. KYC information shall be updated
through KYC/AML updation form attached as per
Annexure H;
8. Ensure that on daily basis before EOD BOI/BM

shall extract change log report from the system
to review the changes in customer title of
account, address, contact number, CNIC number,
mandate detail etc to check that change is as per
the request of the customer and in line with the
guidelines communicated by Head Office from
time to time. Change log report shall be
extracted on daily basis and will be the part of
day end consolidation process.
1. Ensure that on monthly basis (within 10 days

of close of month) BOI/BM will extract exception
report of all out of patterns transactions carried
out by the customers from the system given
reports which is available in CBS. In case of
material deviations branch may also obtain
documentaryevidence to know the genuineness
of the transactions. BOI/BM shall file documents
provided by customers with the monthly
Reports.
2. Check that KYC information shall be updated
through KYC/AML updation form attached as per
Annexure H.
1. Ensure that BOI will review Currency

transaction report form CBS on daily basis;
2. Ensure that BOI will sort out all cash
transactions (Cash Deposit, Cash Withdrawal,
Online Cash Deposit, Online Cash Withdrawal
etc.) equal to or above Rs.2 million for single
transaction.
3. ENsure that BOI will prepare Currency

transaction report by completing the all requisite
fields of Annexure I and forward this report to
BM
4. Ensure that BM will review the currency

transaction report and ensure that all the
information provided is correct i.e. CNIC number,
Customer name, transactions amount, customer
Cell number and address etc.
5. Check that after successful review BM /BOI

will put their signatures.
6. Check that BOI will email the same to
Compliance Department
(HO.Compliance@mfb.com.pk) at head office in
PDF and MS Excel form.
7. ENsure that in case of Online Cash Deposit,

Cash withdrawal equal to or above Rs.2 Million it
will be the responsibility of the responding
branch (Home Branch) to prepare and report
CTR.
8. Check that BM/BOI will ensure that all

currency transactions are reported within 3
working days to KYC/AML Unit.
9. Check that BOI will maintain a proper record

of all CTRs both in soft and hard form in
chronological order for Audit and Compliance
review.
1. Check that BOI/BM shall pay special attention
to all complex, unusually large and out of pattern
transactions, which have no visible economic &
lawful purpose. Background and purpose of
these transactions shall as far as possible be
examined and findings must be established in
writing as soon as possible but not later than 7
days of transaction on the prescribed format
attached as Annexure - J.
2. Ensure that in case suspicion persists &

established, matter should be reported to
Compliance Department on the same day.
3. Ensure that in case of suspicion raised by

Compliance Department, branch will ensure to
obtain and provide necessary information as
soon as possible but not later than 5 working
days or as required by Compliance Department.
4. Check that the employees of the FMFB are

strictly prohibited to disclose the fact to the
customer or any other quarter that a cash
transaction, suspicious transaction or related
information is being or has been reported to any
authority, otherwise required by law.
1. Ensure that the Branches (BOI/BM) will

maintain record of identification data obtained
through CDD process like copies of identification
documents, account opening forms, KYC
information, verification documents and other
documents along with records of account files
and business correspondence, for a minimum
period of ten years after the business
relationship is ended. The identification records
may be maintained in document as originals or
copies subject to bank‟s attestation.
2. Ensure that branches will maintain all
necessary records of transactions, both domestic
and International, for at least Ten years following
completion of the transaction. Such record must
be sufficient for reconstruction of individual
transactions so as to provide, if necessary,
evidence for investigation or prosecution of
criminal activity.
3. Ensure that branches will retain these records

for longer period where transactions, customers
or accounts involve litigation or it is required by
court or other competent authority.
4. Check that branches shall also ensure

compliance to record management procedures /
guidelines / circulars communicated from time
to time.

Audit of Bank Branch Liability Products and Account Opening Procedures

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Audit of Bank Branch Liability Products and Account Opening Procedures

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Audit Type Functional Area Sub Functional Area

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan Current Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account

Branch Audit LIABILITY PRODUCT FEATURES & Asaan - Savings Account

Branch Audit Opening & Maintenance of Staff Account

Branch Audit Opening & Maintenance of Staff Account

Branch Audit Opening & Maintenance of Zero Account

Branch Audit Opening & Maintenance of Zero Account

Branch Audit Opening & Maintenance of Zero Account

Branch Audit Opening & Maintenance of Dormant Account Re-Activation

Branch Audit Opening & Maintenance of Dormant Account Re-Activation

Branch Audit Opening & Maintenance of Dormant Account Re-Activation

Branch Audit Opening & Maintenance of Block Accounts

Branch Audit Opening & Maintenance of Block Accounts

Branch Audit Opening & Maintenance of Illiterate Person (Customer)

Branch Audit Opening & Maintenance of Illiterate Person (Customer)

Branch Audit Opening & Maintenance of Illiterate Person (Customer)

Branch Audit Opening & Maintenance of Illiterate Person (Customer)

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Minor Account

Branch Audit Opening & Maintenance of Partnership Account

Branch Audit Opening & Maintenance of Partnership Account

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Opening & Maintenance of Opening of Account - Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Procedures

Branch Audit Deceased Account Payment to legal heirs of deceased Customers

Branch Audit Deceased Account Payment to legal heirs of deceased Customers

Branch Audit KYC/ AML Customer Identification

Branch Audit KYC/ AML Customer Verification

Branch Audit KYC/ AML Customer Verification

Branch Audit KYC/ AML Customer Verification

Branch Audit KYC/ AML Customer Verification