Bank audit

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

22 April 2014 sir..please give me the list of legal documents to be verified for bank loan advances.

VN KULKARNI

VN KULKARNI (Expert)
Follow

22 April 2014 THE QUERY IS VAUGE.HOWEVER THE AUDITOR CAN ASK THE BANK TO FURNISH THE LIST OF DOCUMENTS WHICH ARE REQUIRED TO GE A LOAN.THEREAFTER YOU CAN VERIFY THEM.
THE DOCUMENTS DIFFERS FROM BORROWER TO BORROWER DEPENDING ON THE PURPOSE OF LOAN,SECURITY OFFERED,QUANTOM OF LOAN.

VN KULKARNI

VN KULKARNI (Expert)
Follow

Upgrade to CAclubindia Pro. Subscribe Now!

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

18 July 2024 When applying for a bank loan, whether it's for personal, business, or other purposes, several legal documents need to be verified to ensure the borrower's eligibility and the legality of the transaction. Here's a comprehensive list of common legal documents that banks typically require for loan advances:

### Personal Loans:

1. **Identification Proof:**
- Aadhaar Card, Passport, Voter ID, Driving License, PAN Card, etc.

2. **Residence Proof:**
- Aadhaar Card, Passport, Utility bills (electricity, water, gas), Rental agreement, Property tax receipt, etc.

3. **Income Proof (Salaried Individuals):**
- Salary slips (typically for the last 3-6 months)
- Form 16 (Income Tax Return)
- Bank statements showing salary credits

4. **Income Proof (Self-Employed/Professionals):**
- Income Tax Returns (ITR) for the last 2-3 years
- Profit and Loss Statement
- Balance Sheet certified by a Chartered Accountant

5. **Employment/Business Continuity Proof:**
- Employment certificate or Appointment letter (for salaried individuals)
- Business continuity proof (registration certificate, GST certificate, etc. for self-employed/professionals)

6. **Bank Statements:**
- Bank statements for the last 6 months showing salary/business transactions

7. **Property Documents (if applicable for secured loans):**
- Sale deed, Title deed, Approved building plan, Property tax receipts, etc.

8. **Guarantor's Documents (if applicable):**
- Identification proof, Residence proof, Income proof, Bank statements

9. **Loan Application Form:**
- Duly filled and signed application form as per the bank's format

### Business Loans (Additional Documents):

10. **Business Plan/Project Report:**
- Detailed business plan including projections, feasibility study, etc.

11. **Company Registration Documents:**
- Memorandum and Articles of Association (MOA and AOA)
- Certificate of Incorporation
- Board resolution authorizing borrowing (if applicable)

12. **Partnership Deed (for partnership firms)**

13. **GST Registration Certificate**

14. **Trade License (if applicable)**

15. **Collateral Documents (if applicable):**
- Title deeds of property offered as collateral
- Stock statements (for inventory-based loans)

### Additional Documents Depending on Loan Type:

- **Vehicle Loans:** Vehicle registration documents, Insurance policy
- **Education Loans:** Admission letter, Fee structure from educational institution

### General Considerations:

- **Legal Opinion:** In some cases, banks may also require a legal opinion on the property being offered as collateral or on the borrower's legal standing.

- **Due Diligence:** The bank may conduct additional due diligence based on the loan amount, borrower's credit history, and specific requirements.

### Conclusion:

The exact documents required may vary based on the type of loan, the borrower's profile, and the bank's policies. It's essential for borrowers to check with the bank or financial institution for specific requirements and ensure all documents are accurate, complete, and up-to-date to facilitate a smooth loan approval process.