10 Steps for ensuring Relevance of Bank branch audit

[chellur&prasad]

Dear Members,

 

Let this message be spread to as many members as possible.

1. Please review the advances with special emphasis on whether the branches have obtained CIBIL reports while sanctioning/renewal of advances.

2. Please ensure that high value gold loans are checked physically as exposure to gold loans has increased manifold during the recent past. The physical check will assure that physical custody of the gold ornaments is kept properly.

3. Apart from NPA accounts generated by the system please undertake a review of ledger accounts of selected loan accounts to ensure that no NPA accounts escape from being reported as NPA's. This is because we cannot rely only on system due to the garbage in and garbage out syndrome(Systems can generate output based on what is fed as input into the system).

4. If any item warrants an MOC subject to materiality test please do not hesitate from insisting an MOC.

5. Please keep a watch for inter transfer of balances from one loan account to another loan account merely done at the year end to avoid NPA classification. 

6. Please be conservative about your claims for TA/DA and subject the same to the test of Prudence.

7. Please pay special emphasis on scrutinising documentation with respect to advances. Cover aspects like submission of Stock statements & Book debts statements, Fixing drawing power limits, Legal title, KYC  norms, CIBIL checking, proper disbursal as per sanction letter. It is by thoroughly checking and reporting on documentation irregularities that one can counter the argument that bank branch audit is irrelevant in times of Core Banking Solutions.

7. Please remember that only by making the bank branch audit relevant in these changing times we can continue to have the advantage of the audit of bank branches. 

8. Please pay special attention to ensure that TDS on interest on deposits is deducted correctly as this is one area where many branches do not deduct by claiming they have received Form 15G/H etc. Checking this  area usually reveals that with regard to many deposits TDS is not deducted properly. 

9. Let each member value add in his own way by emphasising on areas exclusively covered at the Branch some of which are given below: 

• Jewels against loans are verified and

stored at branch

• Inspection of assets is done by branch

• Branch has powers for TOD /

commission charges / waivers

• Branch handles all documents

• Branch retains all documents

• KYC is done at branch

Back papers for inputs into CBS system

10. Please ensure that audit is conducted efficiently and effectively and no allegation of negligence be foisted on us.

 

CA Venkateswara Prasad. K

Partner

Chellur & Prasad

Chartered Accountants

No. 204, IInd Floor, R.K. Complex

K.C. Road

Bellary - 583104

---------- Forwarded message ----------
From: Madhukar Hiregange <mhire...@gmail.com>
Date: Fri, Mar 23, 2012 at 9:36 AM
Subject: Re: Congratulations and thanks
To: chellur&prasad <chellu...@gmail.com>
Cc: pres...@icai.org, vicepr...@icai.in, rajku...@gmail.com, bhe...@gmail.com, bhavna...@gmail.com, jay...@icai.org, pan...@kjco.net, s...@gmj.co.in, devara...@yahoo.com, victorg...@gmail.com, g...@vsnl.com, j...@icai.org, ca.suma...@gmail.com, bkv...@yahoo.com, vishnubharathco <vishnub...@gmail.com>, msudhir_a...@rediffmail.com, "K.RAJA SEKHAR & CO CHARTERED ACCOUNTANTS" <casek...@gmail.com>, pann...@gmail.com, Chellur prasad <chellurp...@gmail.com>


Dear Professional Collegue,

Now that we have got success [ we actaully means the PP and present
president Jaydeep Shah who has worked in various smart ways to get us
what we have got.

However we need to emphasize that this year we the CAs who conduct the
bank audit should ensure that the audit is conducted efficeintly and
effectively and no allegation of negligence be foisted on us. We need
to also ensure that once we get the intimation we go immediately and
do the system review/ fill up the LFAR. At a later point of time when
we are doing the audit let us not knuckle under pressure of the
managers to either cut short the audit or avoid qualification/ MOC.

Let us spread the message that this time around we should show the
banks what audit is all about.

Warm REgards

Madhukar N Hiregange
Partner
Hiregange & Associates
Chartered Accountants
HO - 1010, 1st Floor,
Branch: "Basheer Villa",
Above Corporation Bank,
H.No.8-2-268/1/16/B,
26th Main,  4th T Block,                                          2nd
Floor, Sriniketan
Jayanagar,  Bangalore- 560 041                               Colony,
Road No.3, Banjara
Tel: Dir. 41210703 Tele fax. 26536404/5                    Hills,
Hyderabad- 500034
Web Site: hiregange.com                                         CA
Sudhir V.S - 09908113787