I

Cash

1

Verify that cash balance is with in limits fixed by controlling authorities

2

Check the adequacy of insurance cover of cash-on-hand and cash in transit

3

See that cash is maintained in custody of two or more officials

4

See documents relating to checking of cash balance by bank officials during the year

II

Balances with Reserve Bank of India, State Bank of India and Other Banks

1

See the confirmation certificate obtained from RBI, SBI and other banks

2

In bank reconciliation verify the cash transaction remaining un responded, revenue items requiring adjustments/write off and old outstanding entries

III

Investments

1

Physically verify the investments held by branch on behalf of head office

2

See that income received on investments reported to head office

3

See that income on investments is recognized in the branch is not in contrary to instructions issued by controlling authorities

4

Obtain the list of matured or overdue investments which have not been verified

5

Verify that guidelines of RBI regarding securities have been compiled with

6

Verify that guidelines of RBI regarding valuation of investments have been complied with

IV

Advances

1

See that branch has complied with procedures/instructions issued by controlling authorities regarding loan applications enhancements of limits etc

2

Verify that credit facilities have been sanctioned with in limits fixed by branch or controlling authorities

3

Verify that advances have been disbursed after complying terms and conditions of the sanction

4

Examine that credit facilities have been released by branch after execution of all necessary documents

5

List out the cases of deficiency in documentation, non-registration of charge, non obtaining of guarantees

6

Examine that advances against lien of deposits have been granted by marking a lien on the deposit

7

Check that register has been maintained noting the due date for renewal of limits

8

Do analysis of accounts overdue for review/renewal

9

Examine that stock/book debt statements and other periodic operational data and financial statements, etc., received regularly from the borrowers and duly scrutinized

10

Examine the system of obtaining reports on stock audits periodically

11

Obtain the cases of advances to non-corporate entities with limits beyond Rs. 10 lakhs where the Branch has not obtained the audited accounts of borrowers

12

Obtain the report on inspection or physical verification of securities charged to the Bank

13

List out the cases of deficiencies in value of securities and inspection thereof or any other adverse features such as frequent/unauthorized over–drawing beyond limits, inadequate insurance coverage, etc

14

Verify that in respect of leasing finance activities, branch has complied with the guidelines issued by the controlling autho–rities of the bank relating to security creation, asset inspection, insurance, etc

15

Check the recovery of credit card dues

16

Verify that branch has identified and classified advances into standard/substandard/doubtful/loss assets in line with the norms prescribed by the Reserve Bank of India

17

Issue Memorandum of change where disagrees with the branch classification of advances into standard/substandard/doubtful/loss assets

18

List out cases where the relevant Controlling authority of the bank has authorised legal action for recovery of advances or recalling of advances but no such action was taken by the branch

19

Confirm that all non-performing advances been promptly reported to the controlling Authority of the bank

20

Confirm that appropriate claims for DICGC and Export Credit Guarantee/Insurance and sub-sidies, if any, been duly lodged and settled. Obtain the year wise status of pending claims both in number and amounts

21

Confirm that branch has obtained valuation reports from approved valuers for the fixed assets charged to the bank, once in three years

22

Confirm that branch complied with the recovery Policy prescribed by the controlling authorities of the bank with respect to compromise/ settlement and write-off cases

23

List out the cases of compromise/ settlement and write-off cases involving write-offs/waivers in excess of Rs. 50.00 lakhs.

24

List out the major deficiencies in credit review ,monitoring and supervision

25

Take the details of outstanding amounts of guarantees invoked and funded by the Branch at the end of the year

26

Take the details of the outstanding amounts of letters of credit and co-acceptances funded by the Branch at the end of the year

V

Other assets

1

Check the internal control over issue and custody of stationery comprising security items

2

List out the details of missing/lost items of stationery ?

3

Confirm that system of the Bank ensure expeditious clearance of items debited to Suspense account?

4

List out details of old outstanding entries in suspense account along with reasons

VI

Liabilities

1

List out the cases where guidelines with respect to conduct and operations of inoperative accounts are not being followed

2

List out details of the cases where any unusual large movements (whether increase or decrease) in the aggregate deposits held at the year-end after the balance sheet date and till the date of audit

3

List out overdue/matured term deposits at the end of the year

4

Scrutinize the bills payable, Sundry Deposits accounts with special attention for old outstanding items or unusual items etc

5

List out major items of contingent liabilities

VII

Profit and loss account

1

Test check discrepancies in interest/discount and for timely adjustment thereof

2

Test check that branch has complied with the Income Recognition norms prescribed by RBI

3

Examine the system of estimating and providing interest accrued on overdue/matured term deposits

4

Examine any divergent trends in major items of income and expendi-ture, which are not satisfactorily explained by the branch

VIII

General

1

Confirm that in case books of account are maintained manually, they have been properly maintained, with balances duly inked out and authenticated by the authorized signatories

2

In case of computerized branch confirm that hard copies of accounts are printed regularly

3

Check the adequacy of access and data security measures

4

Check that user time out is prescribed and followed

5

Confirm that regular backup of accounts are taken

Check the contingency and disaster recovery plans for loss/encryption of data

7

Check the reconciliation status of control and subsidiary records

8

Confirm that branch forward on a daily basis to a designated cell/Head Office, a statement of debit/credit transactions in relation to other branches

9

Confirm that branch expeditiously comply with/respond to the communications from the designated cell/Head Office as regards unmatched transactions

10

Check out major adverse comments arising out of the latest reports of the previous auditors, concurrent auditors, stock auditors or internal auditors, or in the special audit report or in the inspection Report of the Reserve Bank of India

11

See the details of frauds discovered during the year

12

Examine that accounts do not indicate any possible window dressings

IX

For Branches dealing in Foreign Exchange Transactions

1

List out any material adverse features pointed out in the reports of concurrent auditors, internal auditors and/or the Reserve Bank of India’s inspection report, which continue to persist in relation to NRE/NRO/NRNR/FCNRB/EEFC/ RFC and other similar deposit accounts.

2

Confirm that the Branch has followed the instructions and guidelines of the controlling authorities of the bank with regard to deposits, advances, export bills, bill for collection ,dealing room operations in relation to the foreign exchange

3

Confirm that Nostro Accounts are regularly operated

4

See that periodic balance confirmations obtained from all concerned overseas branches/ correspondents in respect of Nostro accounts

5

Confirm that Nostro accounts are reconciled periodically

6

Confirm that branch followed the prescribed procedures in relation to maintenance of Vostro Accounts

X

For branches dealing in very large advances such as corporate banking branches and industrial finance branches or branches with advances in excess of Rs. 100 crores.

1

Obtain information from management in prescribed format of borrowers with outstanding of Rs. 2 crores and above

2

See the significant adverse features and which might need the attention of the management/ central Statutory Auditors

3

Check the major shortcomings in credit appraisal, monitoring, etc.

4

List the accounts (with outstand-ings in excess of Rs. 1.00 crore), which have either been downgraded or upgraded with regard to their classification as Non Performing Asset or Standard Asset during the year

XI

For branches dealing in recovery of Non Performing Assets such as asset recovery branches

1

Obtain information from manage-ment in prescribed format of borrowers with outstanding of Rs. 2 crores and above

2

List out the accounts (with outstandings in excess of Rs. 2.00 crores), which have been upgraded from Non Performing to Standard during the year and the reasons therefore

3

Check the age-wise analysis of the recovery suits filed and pending cases

4

Check that branch is prompt in ensuring execution of decrees obtained for recovery from the defaulting borrowers

5

List out the recoveries and their appropriation against the interest and the principal and the accounts settled/written off/closed during the year

6

List out the details of new borrower accounts transferred to the Branch during the year. Confirm that all the relevant documents and records relating to these borrower accounts been transferred to the Branch. Confirm that the Branch obtained confirmation that all the accounts of the borrower (including non-fund based exposures and deposits pending adjustment/ margin deposits) been transferred to the Branch

XII

For branches dealing in Clearing House Operations, normally referred to as Service Branches

1

Confirm that branch have a system of periodic review of the outstanding entries in clearing adjustments accounts

2

Review clearing adjustments accounts (inwards/outwards) for any old/ large/unusual outstanding entries

3

Confirm that the Branch strictly followed the guidelines of the controlling authority of the bank with respect to operations related to clearing transactions