Audit of Banks

This query is : Resolved

Guest

Guest (Querist)

09 April 2011 In case of Concurrent Audit while checking the fresh Advances made by the bank what details & formalities should be confirmed for example if a bank advances a term loan of Rs. 10.00 lacs to a customer what papers should be checked?

Please help me i m really unaware about all this and i have to do a concurrent audit next month.

CA shilpa shinagare

CA shilpa shinagare (Expert)
Follow

09 April 2011 Broadly what u have to see is purpose for which loan application is put up. so first go through the application and then the sanction note or proposal prepared by the branch and then u have to verify the documents.The list of the documents genrally includes DP note, hypothecation agreement if the term loan is for purchase of machinery or vehicle etc.and then guarantee agrrement if guarantee is there and other documents as per the list available with the branch or forming part of application itself. Then ensure the end use of funds by asking for stamped receipts from the payorder issued by the branch to the suppliers and also c the incometax papers, KYC papers of the borrowers, pre and post sanction inspection reports by the branch officials, CIBIL report of the borrower and then ensure whether the terms and conditions as per sanction note are complied with or not and also verify the rate of interest as per sanction note and as entered in the system.these are the broad guidelines.plz go thru the circulars and operational manuals available at the branches or go thru theie intranet since circulars and all are now available online.discuss ur observation n then report it through query sheet for final reporting purpose.

Guest

Guest (Querist)

11 April 2011 Thanku Maam,
But still i'll need ur help during the course of concurrent audit.

please be with me. I will ask some more questions in this regard in future.
I shall be very thankful to u for ur support.

Upgrade to CAclubindia Pro. Subscribe Now!