INDEX OF THE EBOOK
Key Points 3
Asset Classification & Provisioning – a ready
reckoner 4
Income Recognition & Asset Classification Norms
- at a Glance 5-9
Asset Classification – at a Glance 10
Important Audit Checks 11-13
Draft Management Representation Letter 14-16
Format of Letter to Branch 17-20
Checklist for Audit of Advances accounts 21-23
Checklist for Audit of LFAR 24-29
Remuneration to Auditors 30-32
Overall Audit Plan- Audit Programme 33-34
Format of Certificate from Bank Branch 34
Audit Program for Branch Audit of a Bank 35
Other Charts / Formats (including Audit Report
Format) which may be used during Audit 36-40
Bank Audit Manual by CA. Sanjay K Agarwal Page No.3
KEY POINTS
Break Even Date for NPA is 01.01.2015 for the year 2014-2015
Once an account has been classified as NPA, all the facilities granted to the borrower will be
treated as NPA except in respect of Primary Agricultural Credit Societies (PACS)/Farmers
Service Societies (FSS).
Overdue period starts immediately on expiry of due date, concept of ‘past due’ has already been
dispensed with in past years.
Stock statements older than 3 months should not be considered
Interest on advances (accrued and outstanding) should be calculated as on 31st March (few banks
charges interest on advances few days prior to 31st March which should not be considered)
Long outstanding entries (unexplainable and where there is no movement at all) in suspense
account should be suggested for provisioning.
‘NIL’ MOC Certificate should be issued even if there is no MOC
MOC should also be countersigned by Branch Manager (views of the BM if any has to be
attached on a separate sheet duly signed by him)
Submit all the REPORTS including TAX AUDIT REPORTS & LFAR immediately on
completion of Audit and before leaving the branch
Make a columnar list of documents to be submitted to branch/regional/zonal/other office before
commencement of Audit. (it is advisable to get all documents in your custody duly signed by the
Branch Manger at the beginning of Audit)
Must get CERTIFICATE OF ATTENDENCE signed by Branch Manager in duplicate before
leaving the branch
Availability of security or net worth of borrower/guarantor should not be considered for the
purpose of NPA recognition – it should always be based on recovery
100% provision is required for assets which has become doubtful for more than 3 years i.e. NPA
date on or before 31.03.2012.
To specifically report simultaneously to the CEO of the bank and regional office of the Dept of
Banking Supervision RBI where the HO of the bank is situated, any matter susceptible to be
fraud or fraudulent activity or any foul play in any transactions.
Any deliberate failure on part
of the Auditors should render himself liable for action. If amount of fraud involve Rs 1 Crore or
more – central office of the Dept of Banking Supervision, RBI, Mumbai to be reported
immediately.
CLICK HERE TO DOWNLOAD BANK AUDIT 2015 MANUAL PDF FILE
Key Points 3
Asset Classification & Provisioning – a ready
reckoner 4
Income Recognition & Asset Classification Norms
- at a Glance 5-9
Asset Classification – at a Glance 10
Important Audit Checks 11-13
Draft Management Representation Letter 14-16
Format of Letter to Branch 17-20
Checklist for Audit of Advances accounts 21-23
Checklist for Audit of LFAR 24-29
Remuneration to Auditors 30-32
Overall Audit Plan- Audit Programme 33-34
Format of Certificate from Bank Branch 34
Audit Program for Branch Audit of a Bank 35
Other Charts / Formats (including Audit Report
Format) which may be used during Audit 36-40
Bank Audit Manual by CA. Sanjay K Agarwal Page No.3
KEY POINTS
Break Even Date for NPA is 01.01.2015 for the year 2014-2015
Once an account has been classified as NPA, all the facilities granted to the borrower will be
treated as NPA except in respect of Primary Agricultural Credit Societies (PACS)/Farmers
Service Societies (FSS).
Overdue period starts immediately on expiry of due date, concept of ‘past due’ has already been
dispensed with in past years.
Stock statements older than 3 months should not be considered
Interest on advances (accrued and outstanding) should be calculated as on 31st March (few banks
charges interest on advances few days prior to 31st March which should not be considered)
Long outstanding entries (unexplainable and where there is no movement at all) in suspense
account should be suggested for provisioning.
‘NIL’ MOC Certificate should be issued even if there is no MOC
MOC should also be countersigned by Branch Manager (views of the BM if any has to be
attached on a separate sheet duly signed by him)
Submit all the REPORTS including TAX AUDIT REPORTS & LFAR immediately on
completion of Audit and before leaving the branch
Make a columnar list of documents to be submitted to branch/regional/zonal/other office before
commencement of Audit. (it is advisable to get all documents in your custody duly signed by the
Branch Manger at the beginning of Audit)
Must get CERTIFICATE OF ATTENDENCE signed by Branch Manager in duplicate before
leaving the branch
Availability of security or net worth of borrower/guarantor should not be considered for the
purpose of NPA recognition – it should always be based on recovery
100% provision is required for assets which has become doubtful for more than 3 years i.e. NPA
date on or before 31.03.2012.
To specifically report simultaneously to the CEO of the bank and regional office of the Dept of
Banking Supervision RBI where the HO of the bank is situated, any matter susceptible to be
fraud or fraudulent activity or any foul play in any transactions.
Any deliberate failure on part
of the Auditors should render himself liable for action. If amount of fraud involve Rs 1 Crore or
more – central office of the Dept of Banking Supervision, RBI, Mumbai to be reported
immediately.
CLICK HERE TO DOWNLOAD BANK AUDIT 2015 MANUAL PDF FILE
