The banking sector in India has developed tremendously after it adopted the Core Banking Solution (CBS). Finacle is also one of such CBS softwares developed by Infosys. Many nationalized banks such as Bank of Baroda, Bank of India, PNB, Union Bank of India and private bank such as ICICI are using Finacle as their CBS platform. Naturally it has become essential for an Auditor to have a working knowledge of Finacle in order to conduct Bank Audit. Finacle uses different menus for different functions and reports. In this article I have summarized some key Finacle menus and their uses with a view point of an Auditor. I hope readers will find it useful.
1. ACLI (Account Ledger Inquiry)
- This menu is generally used to check the transactions in any account. However, it also provides a wide range of information of a particular account.
- An Auditor can verify the accounts of Fixed assets, Depreciation, TDS remittance pending, Service Tax payable etc. and check if the branch is charging depreciation properly or is it remitting statutory dues on time in order to avoid interest and penalty.
- Sensitive accounts such as Suspense Account, Clearing Adjustments account, Sundry Creditor account can be verified from this menu.
- For finding out revenue leakage, charges debited in accounts can be checked from this menu.
- For customer accounts, after entering the account number in the field, press Ctrl + E keeping the curser in that very box. Type “I” in the general details of the account will be displayed.
- In the options field, press F2 to see the list of options available.
- From such options “Limit History Maintenance” can be used for checking the increase or decrease of sanction limit and drawing power of a particular advance account. (It is exactly similar to the menu option ACLHM.) It also shows the last review date and expiry date of the account.
- Option “Asset Classification Details” can be selected to see if a particular asset is classified as NPA in the system. Auditor can verify if RBI norms are followed in asset classification or not.
2. ACLPCA & ACLPOA (Customer Account Ledger Print & Office Account Ledger Print)
- A soft copy of any account statement cannot be generated from ACLI menu.
- For that purpose, ACLPCA & ACLPOA menus can be used.
- ACLPCA generates soft copy of customer accounts (e.g. Saving Accounts, Overdrafts, CC etc.) while ACLPOA gives office accounts (e.g. Block of Fixed Assets, Cash on Hand, Sundry Expenses etc.)
- Report generated from these menus can be viewed and exported in soft copy from PR menu.
- These menu options can be very useful to Auditors as they can have a copy of transactions of any account for future reference and verification.
3. AFI (Audit File Inquiry)
- This menu is typically useful to Concurrent Auditors who verify transactions on a daily basis.
- AFI generates a list of critical transactions which are required to be monitored closely, such as premature closure of an FD to check charges thereon or transactions in accounts having balance below minimum limit.
- There are numerous such transactions in one day and hence they should be monitored regularly.
4. AVGBAL (Average Balance)
- As the name suggests, this menu gives the average balance maintained in a particular customer’s account for given range of time.
- This menu is useful when commitment charges are taken on OD/CC accounts for under utilization of sanctioned limit.
- Average Balance for a quarter of OD/CC accounts can be found out and checked if commitment charges are applicable on them as per bank’s norms. Thus revenue leakage can be identified.
5. BCREPORT (Bankers Cheque Report)
- To generate a list of Banker’s Cheque Outstanding for payment, following commands should be entered in Finacle:
BCREPORT --> Report To: M --> Self: Y --> Data Centre: N --> Other than Home: N --> Data Centre Icl. Self: N --> Paid Only: N --> From Date: --> To Date: --> F4.
- This will generate a list of Banker’s Cheques issued between the given time period which are outstanding for payment.
- As per RBI circular No. RBI/2013-14/69 dated 01/07/2013; banks should not make payments of Banker’s Cheques which are presented after three months of the date of instrument. However, many banks have BC outstanding over a year.
- Such irregularities should immediately be reported.
6. CUMI (Customer Master Inquiry)
- This menu option searches accounts of one particular customer from the Customer ID.
- It is better than the search option available in menu option ACLI, as it shows Non Fund Based borrowing details also.
- As per RBI master circular on asset classification, if one account of any customer is classified as NPA, all the advance accounts of such customer should be classified as NPA.
- It can be checked from this menu option whether the bank has classified all the accounts of one defaulter as NPAs or not.
7. DCEXPLST ( Report on Expiring Documentary Credits)
- This is an easy menu option which quickly generates the list of Letter of Credits (LCs) expired but not closed.
- Bills are drawn under every LC, but if the LC is expired then such Bills hold no assurance. In addition to that, expired but not closed LCs create unnecessary contingent liabilities for the bank.
- Such LCs should be closed before the Balance Sheet date to avoid misrepresentation.
8. DCQRY ( Query on Documentary Credit)
- This menu generates the list of all inland/foreign LCs issued during the given period.
- The documents regarding all such LCs and the commission charged thereon can be easily verified from this menu.
- Auditor can also check if the details entered in the system are as mentioned in the documents.
- This menu is easy because it shows the list of both Inward and Outward Documentary Credits, thus the Auditor does not have to verify one by one LC from IDCM or ODCM menu options. Each LC can be verified from this menu.
9. EXCPRPT (Exception Report)
- This is a very interesting menu. Many banks have zero tolerance norms regarding generation of Exception Report everyday in their branches.
- As the name suggests, it generates the list of exceptional financial and non-financial transactions during the given period. Exceptional transactions such as activities in accounts which are due for review, advance balance greater than the Sanctioned Limit, accounts opened without introducers, system generated commission changed manually etc.
- Auditor should verify such transactions and report any material irregularity observed.
10. GR (Generate Report)
- This menu generates the balance sheet and profit and loss account of the bank branch on a given date.
- This menu can effectively be used to figure out daily balance of advances and deposits of the bank. Major expenses can also be checked and provision of interest accrued and Non Performing Asset can be verified.
- Sudden increase in advances and deposits just before the balance sheet date should be verified to check any window dressing done by the branch.
11. FTI (Financial Transaction Inquiry)
- It allows searching the details of a transaction by its Transaction ID.
- List of transactions between ranges of amounts can also be generated from this menu.
- High value transactions which suddenly increased the advance or suspicious transactions such as cash deposit of Rs. 49,999/- or Rs. 99,999/- can be seen and verified from this menu.
12. ACDREV (Accounts Due for Review)
- As per RBI master circular RBI/2013-14/62 dated 01/07/2013, accounts where the regular/ ad hoc credit limits have not been reviewed/ renewed within 180 days from the due date/ date of sanction should be treated as NPA.
- ACDREV generates the list of accounts pending due for review as on a given date.
- It should be checked by the Auditor that no account is due for review over 6 months on a given date.
13. IRM/ ORM (Inward/ Outward Remittance Maintenance)
- A branch having foreign business will obviously have Inward and Outward remittances in foreign currencies.
- The charges upon those remittances can be checked from these menus; moreover it generates the actual list of transactions the branch has entered into. Auditor can verify supporting documents for such transactions.
14. MSGOIRP (Outstanding Items Report)
- The branches may have long outstanding entries in sensitive accounts such as Suspense Account, Special Debit Account, Pension Payment Account, Sundry Deposits, Sundry Creditors etc.
- MSGOIRP gives day wise break up of balances in such accounts, indicating how old one particular entry is.
- Long outstanding entries can be reversed for better presentation in financial statements; however same should be discussed thoroughly with Bank Management.
15. NPARPT (NPA Report)
- This menu simply generates the list of accounts classified as NPAs in Finacle.
- Auditor should verify that the balance sheet shows the exact amount of NPAs as Finacle.
- Discrepancies, if any, should immediately be reported.
16. LADRPT (LAD Report)
- The bank collects Letter of Acknowledgement of Debt (LAD) time to time from its borrowers to avoid the debt becoming “Time Barred”
- Ideally Banks should obtain LADs in applicable cases every 3 years.
- LADRPT gives the list of LADs expiring in given period.
- LADs which are to be expired should immediately be reported and Auditor should ensure that branch takes proper steps to obtain fresh LADs from such borrowers.
17. LAOPI (Loan Overdue Position Inquiry)/ TODRP (Temporary OD Report)
- These menu options generate lists of Loan accounts which are overdue.
- Such accounts should closely be monitored, because there are high chances of them becoming NPAs.
18. PR (Print Reports)
Through this menu, various reports generated in Finacle can be printed or a softcopy of such reports can be taken on hard drive.
19. GILR ( Guarantee Issued Liability Register)
- Guarantees which are expired but not cancelled can be checked from this menu.
- The branch should cancel all the expired BGs for better presentation in Financial Statements.
- Guarantees invoked can also be seen from this menu and Auditor can verify recovery in such cases.
20. POVDPC (Party wise Overdue Packing Credit)]
- This menu option lists the Packing Credits disbursed to various customers which are overdue as on date.
- Recovery process should be done by the bank in all such cases.
- Auditor should also verify that the due date of Packing Credit is decided according to the Sanction Letter.
Finacle has hundreds of menu options but of course not all of them are useful to Auditors. This is only an exhaustive list of Finacle menu options which can be useful in the process of a Bank Audit.
Although Bank Audit is much more than just knowing the Core Banking Software, a proper understanding of such softwares ensures a smooth and result oriented Audit Procedure.
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