Bank audit
This query is : Resolved
10 April 2010
can anybody give me a brief working of banks
10 April 2010
What kind of working u wan ?
12 April 2010
lyk....
the whole working of bank from 1st april to 31st march in a summarised manner.
lyk,relation of bank with internal,concurrent,statutory auditors in relation to audit.
relation of bank with govt & other parties.
relation of bank with RBI in relation to SLR,CRR and others
in short i want to knw the whole banking structure.
In nutshell i want to all the activities bank carries out during the whole year in relation to tds,other reports it submits to govt,its stakeholders,auditors;its transactions with foreign countries.
the whole working of bank from 1st april to 31st march in a summarised manner.
lyk,relation of bank with internal,concurrent,statutory auditors in relation to audit.
relation of bank with govt & other parties.
relation of bank with RBI in relation to SLR,CRR and others
in short i want to knw the whole banking structure.
In nutshell i want to all the activities bank carries out during the whole year in relation to tds,other reports it submits to govt,its stakeholders,auditors;its transactions with foreign countries.
18 July 2024
Certainly! Here's a summarized overview of how a bank operates throughout the financial year (typically from 1st April to 31st March), covering various aspects including audits, relations with stakeholders, compliance with regulatory requirements, and transactions with foreign entities:
### Banking Operations Overview:
#### Internal Operations:
1. **Customer Transactions:**
- Banks facilitate deposits, withdrawals, loans, and other financial services for customers.
2. **Risk Management:**
- Banks manage credit risk, market risk, operational risk, and liquidity risk through robust risk management frameworks.
3. **Financial Reporting:**
- Regular preparation of financial statements (quarterly and annually) to reflect the financial position and performance of the bank.
4. **Compliance and Internal Audit:**
- Internal auditors ensure compliance with internal policies and procedures, identify operational efficiencies, and report findings to management.
#### Audits:
- **Internal Auditors:**
- Conducts periodic audits to ensure internal controls are effective and risks are managed appropriately.
- **Concurrent Auditors:**
- Review transactions and operations on a real-time basis to ensure accuracy and compliance with policies.
- **Statutory Auditors:**
- Conduct annual audits as per regulatory requirements to provide an independent opinion on the financial statements' accuracy and compliance with accounting standards.
#### Relations with Government and Other Parties:
- **Regulatory Compliance:**
- Banks comply with regulations set by the Reserve Bank of India (RBI) regarding capital adequacy, liquidity, asset classification, provisioning norms, etc.
- **Reporting to Government:**
- Submission of various reports to regulatory authorities such as RBI, Income Tax Department, and other government agencies as required (e.g., Annual Financial Statements, SLR/CRR compliance reports, TDS statements).
- **Stakeholders:**
- Banks maintain relationships with shareholders, providing them with financial updates, conducting Annual General Meetings (AGMs), and distributing dividends.
#### Relations with RBI:
- **SLR (Statutory Liquidity Ratio):**
- Banks maintain a certain percentage of their Net Demand and Time Liabilities (NDTL) in the form of liquid assets like cash, gold, or approved securities as per RBI regulations.
- **CRR (Cash Reserve Ratio):**
- Banks are required to maintain a percentage of their NDTL with the RBI in the form of cash reserves, which is non-interest-bearing.
- **Regulatory Guidance:**
- RBI provides guidelines, circulars, and notifications related to banking operations, monetary policy, and regulatory compliance.
#### Transactions with Foreign Countries:
- **Foreign Exchange Operations:**
- Facilitate foreign currency transactions, trade finance, export-import financing, and foreign remittances as per Foreign Exchange Management Act (FEMA) guidelines.
- **Correspondent Banking Relationships:**
- Maintain relationships with foreign banks to facilitate international transactions and services.
### Conclusion:
Banks operate within a complex regulatory environment, ensuring compliance with internal policies and external regulations while managing relationships with customers, auditors, government authorities, RBI, and international counterparts. The activities throughout the year encompass a wide range of financial services, regulatory compliance, risk management, and reporting obligations aimed at maintaining financial stability and serving the needs of various stakeholders.
### Banking Operations Overview:
#### Internal Operations:
1. **Customer Transactions:**
- Banks facilitate deposits, withdrawals, loans, and other financial services for customers.
2. **Risk Management:**
- Banks manage credit risk, market risk, operational risk, and liquidity risk through robust risk management frameworks.
3. **Financial Reporting:**
- Regular preparation of financial statements (quarterly and annually) to reflect the financial position and performance of the bank.
4. **Compliance and Internal Audit:**
- Internal auditors ensure compliance with internal policies and procedures, identify operational efficiencies, and report findings to management.
#### Audits:
- **Internal Auditors:**
- Conducts periodic audits to ensure internal controls are effective and risks are managed appropriately.
- **Concurrent Auditors:**
- Review transactions and operations on a real-time basis to ensure accuracy and compliance with policies.
- **Statutory Auditors:**
- Conduct annual audits as per regulatory requirements to provide an independent opinion on the financial statements' accuracy and compliance with accounting standards.
#### Relations with Government and Other Parties:
- **Regulatory Compliance:**
- Banks comply with regulations set by the Reserve Bank of India (RBI) regarding capital adequacy, liquidity, asset classification, provisioning norms, etc.
- **Reporting to Government:**
- Submission of various reports to regulatory authorities such as RBI, Income Tax Department, and other government agencies as required (e.g., Annual Financial Statements, SLR/CRR compliance reports, TDS statements).
- **Stakeholders:**
- Banks maintain relationships with shareholders, providing them with financial updates, conducting Annual General Meetings (AGMs), and distributing dividends.
#### Relations with RBI:
- **SLR (Statutory Liquidity Ratio):**
- Banks maintain a certain percentage of their Net Demand and Time Liabilities (NDTL) in the form of liquid assets like cash, gold, or approved securities as per RBI regulations.
- **CRR (Cash Reserve Ratio):**
- Banks are required to maintain a percentage of their NDTL with the RBI in the form of cash reserves, which is non-interest-bearing.
- **Regulatory Guidance:**
- RBI provides guidelines, circulars, and notifications related to banking operations, monetary policy, and regulatory compliance.
#### Transactions with Foreign Countries:
- **Foreign Exchange Operations:**
- Facilitate foreign currency transactions, trade finance, export-import financing, and foreign remittances as per Foreign Exchange Management Act (FEMA) guidelines.
- **Correspondent Banking Relationships:**
- Maintain relationships with foreign banks to facilitate international transactions and services.
### Conclusion:
Banks operate within a complex regulatory environment, ensuring compliance with internal policies and external regulations while managing relationships with customers, auditors, government authorities, RBI, and international counterparts. The activities throughout the year encompass a wide range of financial services, regulatory compliance, risk management, and reporting obligations aimed at maintaining financial stability and serving the needs of various stakeholders.
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