Taxmann's Practical Workbook For Bank Branch Auditors

About the Author Born on 10th February 1969, commerce graduate from St. John’s College Agra, Ishwar Chandra is a Fellow Member of the Institute of Chartered Accountants of India (ICAI). He is a Chartered Accountant practicing since 1993 and is Partner in M/s.

IC & Associates, Agra.

He holds DISA from ICAI and CISA from Information Systems Audit & Control Association (ISACA) USA. He CA. ISHWAR CHANDRA holds Certificates in IFRS, in Forensic Accounting and Fraud Detection (FAFD) and in Concurrent Audit of Banks from ICAI Mainly practicing auditing, his major work experience includes Concurrent Audit, IS Audit, Stock Audit, Income & Expenditure Audit and External Audit of various Commercial, Regional Rural and Co-operative Banks and Internal & External Audit and other assignments of PSUs. His approach and procedures articles on auditing of banks have been immensely published in ‘The Chartered Accountant’ Journal of ICAI. He is author of Five C’s of IT Policy published in ‘Internal Auditor’, of the Institute of Internal Auditors, (USA).

He has been one of the Subject Matter Expert (SME) Reviewers of ISACA’s CISA Review Manuals (26th and 27th Editions) and is a contributor on IS auditing to ISACA. He has participated in International Federation of Accountants (IFAC) consultation paper ‘Improving Auditor Reporting’.

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R O H T U A E H T T U O B A

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In his 29 years of professional career, he has delivered several lectures on auditing of banks at ICAI seminars organized by CIRC, SIRC and NIRC branches/study circle. He has been associated with various Boards/Committees of ICAI. He has been a member of a Financial Reporting Review Group constituted by Financial Reporting Review Board (FRRB) of ICAI and has acted as lead reviewer. He is associated with FRRB as Technical Reviewer (TR) and with Peer Review Board of ICAI as Peer Reviewer. He is associated with Committee on Capital Markets and Investors’ Protection (CCMIP) of ICAI as Resource Person. His academic associations also include the Institute of Company Secretaries of India (ICSI) and the Institute of Cost Accountants of India. He is a founder trustee of Shri Rajendra Prasad Munni Devi Agrawal Memorial Trust, a registered public charitable trust. n n a m x a T ( ’ l a u n a M

s e r u d e c o r P t i d u. ) Ad t tL n . ev t r r P us cn no oi t Ca c kl i nb au BP ‘ ) 1 (

His Books on Auditing of Banks

n n a m x a T ( ’ s r o t i d u A h c n a r B k n a B r o) f . kd ot oL b. t kv rP os Wn o li a t ca i c t i c l ab r u PP ‘ ) 2 ( n i d e h s i l b u p g n: i e t i r d a us al a nn or u so e J l c l i a t r n a o i ss e s r e f uo dr ep cl oa rn po i dt na an r he ct n ai o/ rl pa pn ao i t sa i Hn

Articles Published

l a n r e t n I f o e t u t i t s n I e h t f o e n i z a g a me v i F ‘ : ) A S U ( , s r o t i d u A

(1) ‘Internal Auditor’

C’s of IT Policy’ (Dec. 2008)

‘

(2) ‘The Chartered Accountant’ Journal of ICAI

‘Conducting Statutory Branch Audit in CBS environment: An Approach’, 0 1 0 2 h c r a M , 9 . o N 8 5 . l o V

u

‘Statutory Bank Branch Audit : Strengthening Audit Plan’, 2 1 0 2 h c r a M , 9 . o N 1 6 . l o V

u

‘Essentials of Report Writing’,

3 1 0 2 e n u J , 2 1 . o N 1 6 . l o V

u

What Every Statutory Branch Auditor of a Bank Should Do’, 6 1 0 2 h c r a M , 9 . o N 4 6 . l o V

u

R O H T U A E H T T U O B A

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6 5 . l o V

‘improving Risk Management and Compliance’,

u

‘Planning the Statutory Branch Audit’ : An Approach’, 7 0 0 2 h c r a M 9 . o N 5 5 . l o V

‘Auditing in Core-Banking Environment: Some Special Considerations’, , KYC & Anti Money Laundering Measures’,

5 5 . l o V

6 0 0 2 r e b m e t p e S , 3 . o ‘N

u

8 0 0 2 h c r a M , 9 0 . o N 6 5 . l o V

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8 0 0 2 y a M , 1 1 . o N

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Preface to the First Edition It gives me immense happiness to present the First Edition of ‘Practical Workbook for Statutory Branch Auditors of Banks’ In fact, through experience of about twenty years in auditing especially in auditing of banks, I was feeling an acute need for a book which may not only suggest audit procedures adhering RBI guidelines and ICAI Standards, but may also help meet auditors’ documentation needs simultaneously. By the grace of Almighty, this book is an attempt to meet this need.

Statutory branch auditing plays a crucial role in enhancing credibility of financial statements of banks. According to Section 143(9) of the Companies Act, 2013, “Every auditor shall comply with the auditing standards. “Further, requirement of auditor’s reporting of information ‘sought’ and ‘obtained’ has now made documentation of audit procedures paramount importance Plethora of audit reports/certificates and strict datelines to submit the reports demands audit planning in a more effective and efficient manner. Aside enhanced fraud risk particularly in Advances area has created a need for being more alert and for applying enhanced professional skepticism throughout the audit.

While deciding over the structure and contents of the book, I was in little dilemma, whether it should be a reference book or a procedures manual. Finally, I decided to write a book that could work as audit work programme cum audit note book with suggested procedures and all relevant references. Of course, I have been able to use several contents of my book ‘Bank Concurrent Audit Procedures Manual’. Yet, to keep the contents tight focused and compact confining to financial statements’ audit, background information on banking operations I-9

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e or t o rm e f f a o n fi o t i ed cu na ae t h p et ct cc au d en . hor t ce pn ml n oea rhm f d tu l d h e gon i wn r a tl i p d ud an fa o c i gt na i m t r e ot ps y es r and processes have been skipped, as the book is meant for practitioners.

The aim and the approach of writing the book has been to help branch auditors understand ‘What to do’ and ‘How to do’ in an efficient and effective manner besides the simultaneous documentation of procedures undertaken. ‘What to do’ is chiefly based on statutory requirements and RBI guidelines, while in how to do’, ICAI Standards on Auditing (SAs) and current CBS environment have been kept in mind.

Apart from the audit procedures suggested, salient features of this workbook include: u Staged Approach

t gi nd i u t c a ee l l h o t ct rn oe f m u c o d p l e h d l u o w n o i t a m r o f n i . y gl ns i u t o a e un l a a vl t eu dm ni as n e e b e v a h s A S / s w a l / s e n i l e ds . i u e gc a Il Bp Re t ta n i r ap vo er l e p r p fa o t a d e d u l c n i

p rl e e hh wo ,t e d r e ut da er co op rr po c tn i d i u n ae . s e der ebu t ed s ve e gac gho u,r syp r ea t i s hs d t e u hc a t ee a enh ndt ee y br l e p dp i a s nr s oo ct i rd e vu ea -

h nc on ra i r v nb r eo Sl f Bu Ce f ts n u ed r n r ua ce ) nb i u ec l x b e al . l F d i a e t vda n aa c ,d i yS l l Ci n a N r n e e n@e e b B g, e e l c v aa nh i s F r ( o st t i n d eu ma -

u

Suggested Procedures and with Audit Formats

u

Reference

u

Audit Hints

u

CBS Reports

e ,, l r e t e a t t u t n r a n e e e ni l use r rt p mho m a p m c i mun t oaa s e n ocaarn v I e p o cor mp oi t t i rs t sdbra u t gro ubpe n i q f t ,mg enen h i s s t h i g v gi niu n t i fu tors o olgo i i o f can s os ehs d i est ien ct hic e ,mpa k t uiIn os c podpeaos t c r m d eone n n se ebo nA eua vi kkc h e r r .m t s ool e ea e sr m t pi r ih xrooo ewh r s r nc wWerr i e a g e h e d , . ct i o v r to y nT i yse n n a t f r a etc .t a d e e e hu tr fg ve ergr i ey o ,ddeut v s e ud n,tel on t . t l d en e a ano wc ed ke onnecm t ar i i pn s d,o t r s e e u e n k c euu nl k va i tea i vcq e k n a l ade h memw at hn t r t r i y Ia exlIoael , l h reyetsru t r a , s e r m gc s f a y e s er t e ur i hhmdaa t or d s e t awr re ho i u s lg or of Tc uawt a

7 1 0 2 y r a a u r r g b A e F h t 5 1

CA. Ishwar Chandra

Preface to the Sixth Edition In last two years, COVID-19 pandemic affected the lives and livelihoods worldwide adversely. It affected the economies in general and MSME sector in particular badly. To overcome the situation, Government of India and RBI came out with plethora of relief packages. After the initial COVID-19 related reliefs on 6th August 2020 (Resolution Framework 1.0), RBI came out with another relief package on 5th May 2021 for MSME and individuals vide ‘Resolution Framework 2.0’. Amongst various reliefs, Ministry of MSME, Govt. of India relaxed the definition of MSME and extended the timelines. Further, to improve banks’ financial reporting, RBI on 30th August 2021, came out with new Directions for banks on Financial Statements Presentation and Disclosures. And, amending several norms, on 1st October 2021, RBI came out with new Master Circular on Income Recognition, Asset Classification and Provisioning (IRACP) and various other new directions in last year.

Based upon such changes, I have revised the edition thoroughly.

Chapter ‘Audit of Provisioning’ has been revised thoroughly and chapter ‘Audit of Restructuring of Advances’ has been rewritten renaming as ‘Audit of Resolution of Stressed Assets’. Chapters ‘Audit of Capital Adequacy’ and ‘Special-Purpose Certifications’ have been revised based upon RBI’s extant guidelines.

Of course, I have been able to use several contents of my book ‘Bank Concurrent Audit Procedures Manual’. However, to confine myself with statutory branch auditing, procedures on I-11

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auditing of operations have been skipped. As, it is a reference manual cum audit note book, I have made all possible efforts to make the workbook a one-stop reference for branch auditors and to keep the contents complete and current Yet, human errors and omissions are quite natural and I am confident readers are kind enough to ignore. Also, as it is a live document, auditors are suggested to refer extant updates while auditing.

All constructive feedback/comments from the auditors are most welcome and will be gratefully acknowledged.

.

While revising the edition, I have referred several sources including ICAI Guidance Note on audit of banks, RBI notifications and others I am grateful to all such sources.

Whatever piece of information I had with my little knowledge, I have shared with my colleagues. I pray to Almighty to make this endeavour successful n a w a h B a r d n e j a R

CA. Ishwar Chandra

i r u p r e d n I , 1 / 7 3 A ) P U ( 5 0 0 2 8 2 A R G A , a r g A w e N m o c . l i a m f f i d e r @ 2 0 0 l c _ r a w h s i

2 2 0 2 , 7 2 y r a u r b e F

Acknowledgement First of all, I acknowledge the grace of Almighty for inspiring me to write the book. I want to record my sincere gratitude to late CA Suresh Advani who has been a guide and friend to me and who encouraged me to write the workbook and kept my morale always high. I want to record my sincere gratitude to CA. Amarjit Chopra, Past President, ICAI for sparing his valuable time in vetting the outline and reviewing the draft and suggesting improvements. I am grateful to Shri D K Agrawal and Shri V L Gupta for their guidance and support ever available to me. I am also grateful to Shri B V Upadhye (Ex GM, BOI) for his valuable time and talent put in reviewing the draft and for his suggestions.

I wish to record my gratitude to CA. Surendra K Bansal and CA. (Dr.) D S Rawat and CA. U N Marwah for sparing their valuable time in reviewing the draft and suggesting improvements.

I must acknowledge the contributions of CA. Udesh Dassani, Shri M Venkat Subramanian, AGM, Indian Bank, Shri Ravi Shankar, AGM, SBI and by various others. I am thankful for the assistance provided by CA. Kapil Goyal, Smt. Reena Agrawal, Miss Pranchal and Miss Deeksha in preparing the draft.

I am thankful to Taxmann for reposing their trust in me and bringing out five editions of the Workbook to the branch auditors timely During writing the book, I have referred several sources including ICAI Guidance Note on Audit of Banks, RBI and IBA I-13

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notifications, several websites and others. I am grateful to all those sources.

Finally, my deepest thanks go to my wife Smt. Reena Agrawal, my daughter Miss. Pranchal and my son Master Sujay for their love, support and patience.

CA. Ishwar Chandra

How to use this Workbook m u c

I intend to write this Workbook as Audit Work ProgrammeAudit Note Book. To use this book in an effective manner, I have following tips to recommend: . e . i

- First be acquaint with relevant background information, Statutory Provisions, RBI guidelines and ICAI Standards on Auditing.

- For the sake of convenience and to move in a systematic manner, entire branch audit work has been segregated into five stages. For each stage, ready to use formats, to save auditor’s time and creating audit documentation simultaneously, have been suggested Use these formats effectively.

- Keep the Checklist of tentative audit requirements (given in Chapter 5) handy and have continuous rigorous follow up with the branch management and controllers to collect the information.

- Document the communication made with the branch management and controllers. While communicating the branch, mark a copy to the controllers also.

- Keep tab on audit progress and time budget.

- Note down the audit observations in the workbook itself and attach additional sheets, if needed.

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K O O B K R O W

S I H T E S U O T W O H

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- Important notes to auditors are indicated in boxes. Read these carefully.

I believe this workbook would help minimize the chances of lapses and omissions and would help reduce the audit risk, besides documenting the audit work simultaneously.

Overall, workbook would help auditors accomplishing their branch audits in a more purposeful manner, eventually giving more comfort to the Statutory Central Auditors, Boards and Management.

CA. Ishwar Chandra

Chapter -heads PAGE About the Author

I-5

Preface to the First Edition

I-9

Preface to the Sixth Edition

I-11

Acknowledgement

I-13

How to use this workbook

I-15

Contents

I-19 :

2 R E T P A H C

: : : :

3 R E T P A H C

1 R E T P A H C

INTRODUCTION TO AUDIT OF FINANCIAL STATEMENTS

1

4 R E T P A H C 5 R E T P A H C 7 R E T P A H C 8 R E T P A H C

16

PLANNING CONSIDERATIONS

18

CBS ENVIRONMENT : USEFUL SYSTEM GENERATED REPORTS

28

OFFSITE PLANNING

38

ONSITE PLANNING

42

PERFORMING PRELIMINARY (ROUTINE) AUDIT PROCEDURES

46

AUDIT OF NEW ADVANCES

55

AUDIT OF CREDIT MONITORING

85

: : 0 1 R E T P A H C

9 R E T P A H C

11

POST-ACCEPTANCE PROCEDURES

: : :

6 R E T P A H C

PRE-ACCEPTANCE PROCEDURES

: 1 1 R E T P A H C

104

AUDIT OF INCOME RECOGNITION AND ASSET CLASSIFICATION

110

AUDIT OF PROVISIONING

137

AUDIT OF RESOLUTION OF STRESSED ASSETS

146

PERFORMING GENERAL LEDGER (GL) AND PROFIT & LOSS (PL) AUDIT PROCEDURES

170

LONG FORM AUDIT REPORTING (LFAR) PROCEDURES

181

: 2 1 R E T P A H C

AUDIT OF SPECIAL MENTION ACCOUNTS (SMA)

: 3 1 R E T P A H C : 4 1 R E T P A H C : 5 1 R E T P A H C : 6 1 R E T P A H C

I-17

S D A E H R E T P A H C

: 7 1 R E T P A H C

PAGE

AUDIT OF CAPITAL ADEQUACY

238

SPECIAL-PURPOSE CERTIFICATIONS

247

ISSUING INDEPENDENT BRANCH AUDITORS’ REPORT

252

: 8 1 R E T P A H C : 9 1 R E T P A H C APPENDICES

I-18

269

Contents

PAGE About the Author

I-5 Preface to the First Edition

I-9 Preface to the Sixth Edition

I-11 Acknowledgement

I-13 How to use this workbook

I-15 Chapter-heads

I-17

1

s m r e T y e K

t i d u A n a f o s n o i t a t i m i L t n e r e h n I

e c n a l a b e h t d n a g n i t r o p et Rs o lC a i c d nn aa nt i i f F e fn o e sB s e n ne i e l e w mt e ib T

t n e m e t a t s s i M l a i r e t a M f o y r e v o c s i D t n e u q e s b u S

9 4 9 1 , t c A n o i t a l u g e R g n i k n a B n i s n o i s i v o r P y r o t u t a t S

y n a p m o C g n i k n a B a f o t i d u A

r o t i d u A n a f o s e i t u D d n a s r e w o P

3 1 0 2 , t c A s e i n a p m o C n i s e i t u D d n a s t h g i R s ’ r o t i d u A

6

3 1 0 2 , t c A s e i n a p m o C n i s n o i s i v o r P y r o t u t a t S

d u a r F t r o p e R o t s n o i t a g i l b O s ’ r o t i d u A

8

y r o f t o u tt c a et ps se e h r t nn i i ks re os wp as el me k n aha r t b Fr l noa f os i i c t r r c oe Ai t m td n um ea o myc erf coo t r t u ot i f d a n u t Es a

I-19

7

1.3.3

r o t i d u A e h t f o s e v i t c e j b O l l a r e v O

1.3.4

7

1.3.2

s t n e m e t a t S l a i c n a n i F f o t i d u A n a f o e s o p r u P

y n a p m o C g n i k n a B a f o t i d u A h c n a r B

1.2.1 1.2.2 1.2.3

1 1 2 3

1.1.1 1.1.2 1.1.3 1.1.4 1.1.5

6

1.3

y n a p m o C g n i k n a B a f o t e e h S e c n a l a B d n a s t n u o c c A

1.2

1.3.1

4 4 5 5 6 6 1.1.6

1 1.1

k r o w e m a r F y r o t a l u g e R

INTRODUCTION TO AUDIT OF FINANCIAL STATEMENTS

S T N E T N O C

E G A P

s d r a d n a t S I A C I r e d n u s t n e m e r i u q e R : n o i t a t n e m u c o D t i d u A g n i t i d u A n o d r a d n a t S e h t r e d nI uA sC t I n ef mo 0 e3 r i 2 u ) qA eS R( n o i t a t n e m u c o D t i d u A f o n o i t a v r e s e r P

PRE-ACCEPTANCE PROCEDURES

s a n o i t i s o p e h t g n i t p e c c a r o f y t i l i b i g i l e r eo t hi t d gu na i n y i r a o t t r u e t ca s t As r o t i d u A s u o i v e r P e h t h t i w g n i t a c i n u m m o C r e f f o e h t g n i t p e c c A

s m r e T t n e m e g a g n E t i d u A n o t n e m e e r g A r e t t e L t n e m e g a g n E t i d u A g n i u s s I

POST-ACCEPTANCE PROCEDURES

n o i t a m r o f n I e c n e r e f e R g n i t c e l l o C

d e r a p e r P h c n a r B g n i t t e G

PLANNING CONSIDERATIONS

3 1 0 2 , t c A s e i n a p m o C

n o i t a m r o f n I e h t g n i t n e m u c o’ Dd :e n n i oa i t t a b mO r‘ od f n n a I ’ gt nh i g k u eo eS S‘

) 2 1 ( 3 4 1 n o i t c e s r e d n u s n o i t a r e d i s n o C d u a r F

s n o i t a l u g e R I B R

) s A S ( g n i t i d u A n o s d r a d n a t S I A C I

n a n i s ne oc i n t a a l d u i gu eG RI dA nC aI : ’ ss wt an Le fm o e t na t oS i t l a a r i e c dn i a s ni n oF Cf ‘ 0o 5i t 2d Au SA

21

l a d i r n e a t a y t Mi t fn o E ke sh i Rt g en hi t d gn na i t s s s r e e s d s An dU nh ag gu no’ r i t hn y t f it e t nm n een dmo I r ‘ ei 5tv 1an t s 3s E Ai s t SMi

20

’ t n e m e t a t S l a i c n a n i F f o t i d u A n a g n i n n a l P ‘ 0 0 3 A S

22

4.3.3

n o i t a t n e m u c o D t i d u A

4.3.2

20

4.3

4.3.1

19

4.2

18

4.1.1

18

4.1.2

18 4.1

16 3.2

13 2.3.2

12 2.3

16 3.1

13 2.3.1

12 2.2

10 1.4.3

9 1.4.1

11 2.1

9 1.4.2

9 1.4

I-20

2

3

4

E G A P

n o i t c u d o r t n I f e i r B

s t r o p e R e b u c x e l F d n a S C N @ B

s m e t s y S l o r t n o C l a n r e t n I d n a g n i t n u o c c A e h t g n i d n a t s r e d n U

e r i a n n o i t s e u Q A : n o i t a m r o f n I g n i t c e l l o C

s w e i v e R l a c i t y l a n A y r a n i m i l e r P

s n o s i r a p m o C

s n o i t a l e r r o C

l a c i t i r C / r a l u g e r r I / e g r a L n o n o i t a m r o f n I gs ne i c t n c ea l v l d o CA

ONSITE PLANNING

/ s d g u n a i r s F s e l r a i D t n w e t o o d P n i g W n i r l a e i d t i n s e n t o o Cs P :l f mo o r st s i n n c o o i t C t i p ef a c ko i se d ld n a i I nr or g e i n s v i s y O f e i f t t o n rn e e pm d ge I ng i y a l n p pa AM

d n a s n o i t c n a S d e h s u R f o s n o i t a c i d n I g ns i y t i f s i t o n p ee dD I

42

7.1.1 7.1.2

41

6.3.1 6.3.2 6.3.3

s e c n a v d A d n a s n a o L f o g n i l p m a S r o f s n o i t a s r t e n du i s o nc oc CA

OFFSITE PLANNING

h c n a r B e h t g n i w o n K

6.2.1

42 42

7.1

e b u c x e l fl a i d c r n e a m S C m N o C @ r B o , t e c l e c S a n c i fi l b n u i P e l y b b a l i d a s e t vr s ao u yp e l e l r a r a r 0 w e t n1 f el e o ss g c k s a Sn t n r Ba o i CB p F e r S B C 5.2.1 5.2.2

g n i l p m a S t i d u A f o w e i v r e v O f e i r B

CBS ENVIRONMENT : USEFUL SYSTEM GENERATED REPORTS t n e m n o r i v n E S B C

6.3

e c fi f O d a e H t a h t i w t l a e D y l l a m r o N s r e t t a M

5.2

38 38 38 39 40 41 6.1 6.2

29 29 30 34

5.1.1 5.1.2

26

4.4.1 4.4.2

28 28 5.1

) g n i l p m a S t i d u A 0 3 5 A S ( s n o i t a r e d i s n o C g n i l p m a S 4.3.5

n i d ue ac r n Fa od t i gu nG i t I a A l e C I R: ’ ss e t i n t i le i m b i e s t na ot pS sl e a i Rc g sn n ’ a r i n s oi t s F e i d r f d uo At ‘ i w 0d o 4u d 2A n An i Sa W 4.3.4

27 4.5

22 24 25 25 4.4

S T N E T N O C

I-21

5

6

7

S T N E T N O C

E G A P

m u d n a r o m e M s ’ r a e Y s u o i v e r P f o t) c s eC f f o EM e( hs t e gg nn i a y h f i C r e f Vo h c n a r B e h t f o s e i t i v i t c A g n i s o l C e n i t u o R g n i y f i r e V s n o i t a i l i c n o c e R d n a g n i c n a l a B

48

fy o c sn me t es t i i s tn e eo hC : Sr ea ce nY as l u a o Bi /v s e e r cP nf ao l a t ba h dt ah et hi Lw r Ga ge nY i r t a n k pec re mr ouh CCC s n o i t a c i f i r e V e n i t u o R

g n i h c u o V e l p m a S e n i t u o R

) C N I ( d e t c e l l o C t o N t s e r e t n I d n a A P N f o n o i t a i l t i c n nu oo cc ec RA

AUDIT OF NEW ADVANCES

n o i t c u d o r t n I

s e r u d e c o r p t i d u A

s n a o L g n i s u o H

55

s n a o L l a r u t l u c i r g A

s n a o L r o t c e S y t i r o i r P d n a E M S M

s t n e m e g n a r r A g n i k n a B e l p i t l u M

s t n e m e g n a r r A m u i t r o s n o C

s t n u o c c A r e v o e k a T

) c o h d A / s s e c x E / E U A D / D O T ( s e i t i l i c a F l a u s a C

) s n a o L e g a g t r o M ( s e i t r e p o r P t s n i a g a n a o L

69

9.2.8

52

) eP mC oA cR nI I ( fg o n ei cn ni o es r i e v ho dr AP fd o n ta i n d uo i At a s rc k o fi f c i s e ss h e a r C ul y dC c et n ce e os t rs s PA i , s n yo n r o i a t C i nn i s mgm o ic l r e eo r PRN

67

9.2.7

66

9.2.5

59

9.2.3

66

9.2.6

65

9.2.4

56

9.2.2

55

9.2

9.2.1

55

9.1

52 8.2.1

50 8.1.5

54 8.2.2

51 8.1.6

49 8.1.4

47 8.1.2

g n i n e e r G r e v E l a i t n e t o P fs o e i st nl i oc i i t a a cF i t d i d ne I gr nC i k y a f i e t n W ef do I

PERFORMING PRELIMINARY (ROUTINE) AUDIT PROCEDURES s t n e m e t a t S l a i c n a n i F f o t i d u A r o f s e r u d e c o r P e n i t u o R

8.2

g n i n n a l P n i k r o W s ’ r o t i d u A l a n r e t n I g n i s U 8.1.3

46 8.1.1

44 7.2

46 8.1

43 7.1.3

I-22

8

9

E G A P

s t n e m a n r O r e v l i S / d l o G t s n i a g a n a o L . c t e P V I / C S N / P I L t s n i a g a n a o L

s n a o L f f a t S d n a s r o t c e r i D o t s n a o L ) G B ( s e e t n a r a u G k n a B

s e e t n a r a u G f o t n e m y a P d n a d e k o v n I s e e t n a r a u G ) C L ( t i d e r C f o s r e t t e L

g n i t n u o c s i D / e s a h c r u P l l i B

f o r e t t e L r e d n u s l l i B f o g n i t n u o c s i D / n) oC i L t ( a i t t i o d ge er NC d e g g a l F d e R d n a ) S W E ( s l a n g i S ) gA nF i R n ( rs a t Wn u yo l c r a c EA

l a n / o s i t r i e d t d o mA of ro t Pn fe o m ye t i r l i i u b q ae t n uR od cn ca As r :o s r t i e d t l ug u aAn f / i e s n Dri o o lt s i u c v fe l o rr i i WD P

y b s d u a r F l a i t n e t o P :s s dr ue aw r o Fr r do eB t a s l e u o Rl su e p cu nr ac vs dn AU

10.1.4

s e r u d e c o r p t i d u A

88

l a n o i t i d d A f o t n e m e r i u q e R : s r e w o r r o B e v i t a r g e n pi on o o i s Ci -v n o or NP

87 10.1.3

g t n n i r eo mi t en t o a t M) S yR yl l P r h e Q t t ( n r t oar Muo p /Qe s dR t n n eae c m)n eDa t Om a Sr t S Mo s(r f t ae b t ea P / DD ) -gR kn M i ot Q oa ( Br t /er kpo cOp one t S oR

k n a B e h t o t d e g r a h C s e i t i r u c e S f o n o i t c e p s n I

88

c o h d A / ) L O T ( s t i m i L r e v O y r a r o p m e T / s s e c x E

d e g g a l F d e R d n a ) S W E ( s l a n g i S ) gA nF i R n ( rs a t Wn u yo l c r a c EA

t l u a f e D l u f l i W

: t n u o c c A f o t c u d n o Cs /d s n nu oF i t f a o r e g pn Oi n ro e h vp oi S n/ on i s o i i v s r r e e pv ui SD

s w e i v e R l a u n n A

97

10.2.6

s t i s o p e D m r e T t s n i a g a n a o L

AUDIT OF CREDIT MONITORING n o i t c u d o r t n I

97

10.2.7

95

10.2.5

92

10.2.4

92

10.2.3

83

10.2.1

91

10.2.2

88

10.2

86 10.1.2

85 10.1.1

80 9.2.17

77 9.2.15

s n a o l e l c i h e V

9.2.18

78 9.2.16

74 9.2.14

72 9.2.12

70 9.2.10

73 9.2.13

71 9.2.11

70 9.2.9

85 10.1

S T N E T N O C

I-23

10

S T N E T N O C

E G A P

AUDIT OF SPECIAL MENTION ACCOUNTS (SMA)

t u b n o i t i s o p e u d r e v o y l n o t o N : n o i t o a s cl i a f i s s s s e a r l t C S ff o o sn i s g a i BS

o t n i ) A M S ( s t n u o c c A n o i t n e M l a i c e p S f o s e ni or i o t g a e ct i f a i c s s b a l u C s d e t a r

e Cl Le Ic Rc A C( oe t c gn e nr i t e r h od pa eRn do nn ar o ff o s ne r ou i t s a a ce i ) f g Mn i t n i ln ea o dni I es i yPv l r do a nr EaP d n u o r g k c a B f e i r B

t e s s A , n o i t i n gg on ci en o Ri s ei v mo or cP nd I nn ea vn i o r i Dt a -c i mi f es t s s a y l SC

s t p e c n o C y e K

111

e v i t c e f f E f o t n et a ma eD r i r u a ql eu n Ra -r tG n ed mn ea gm as ni an a Mh Ac Pe NM

n o i t a c i f i s s a l C t e s s A r o f s e n i l e d i u G / s e l p i c n i r P l a r e n e G

s ’ I B R : s n a o L l a r u t l u c i r g A f o s n o i t s a e cn i f i i l s e s d a i l u c tG e y s e s AK

n o i t i n g o c e R e m o c n I

s A P N s a d e i f i s s a l C s t n u o c c A n a o L g n i d a r g p U

s e r u d e c o r P t i d u A

) L T ( s n a o L m r e T

118

D O d n a ) s t b e D k o o B / s k c o t S t s n i a g A ( t i d e r Cs t hi sm a i CL

d e t n u o c s i D / d e s a h c r u P s l l i B

s n a o L l a r u t l u c i r g A

. c t e s P V I / s P V K , s C S N , s t i s o p e D m r e T t s n i a g a s e c n a v d A

128

12.2.5

125

12.2.3

) A M S ( s t n u o c c A n o i t n e M l a i c e p S

AUDIT OF INCOME RECOGNITION AND ASSET CLASSIFICATION s e n i l e d i u G y e K s ’ I B R

126

12.2.4

123

12.2.2

117

12.2

12.2.1

117

12.1.8

115

12.1.6

116

12.1.7

114

12.1.5

106 s e r u d e c o r p t i d u A

12.1.1

112 12.1.4

110

12.1.3

110 12.1.2

110 12.1

n o i t c u d o r t n I

11.1.1

106 11.2

105 11.1.4

104 11.1.3

104 11.1.2

104 11.1

I-24

11

12

E G A P

s E M S M f o n o i t a c i f i s s a l C t e s s A s n o i t a r e d i s n o C l a i c e p S n o i t i n g o c e R e m o c n I

s e c n a t s m u c r i C l a i c e p S r e d n U s n o i s i v o r P s t e s s A d r a d n a t S n o s n o i s i v o r P l a r e n e G

s n o i s i v o r P c i f i c e p S r e h t o d n a s n o i s i v o r P A P N s e r u d e c o r P l a r e n e G

s A P N n o s n o i s i v o r P f o n o i t a c i f i r e V

s e c n a v d A ’ d r a d n a t S ‘ n o s n o i s i v o r P f o n o i t a c i f i r e V

AUDIT OF RESOLUTION OF STRESSED ASSETS

s e r u t a e F y e K : s e n i l e d i u G / s k r o w e m a r F I B R

s t e s s A d e s s e r t S f o n o i t u l o s e R r o f k r o w e m a r F

’ g n i r u t c u r t s e R ‘ o t e l b a c i l p p A s m r o N l a i t n e d u r P

n o i t a t n e m e l p m I r e d n u s t c e j o r P

9s ’ 1e s d s i e v n oi Cs u fB o l nl oa i t m u S l o d sn e Ra s 0a l .

2 u kd i rv oi wd n eI mf ao r s Fs e nr ot i s t u d l e o t sa e l e Rr ‘

154

d n fa o l l na om i t S u l , o o sr e c Ri :M 0 f . o 2 ks rs oes r wt e s s ed i r me p aa tr r e lt Fe nrn o E 9 i m t 1 u u l d i o i d sv e oe RCM

y t i m a l a C l a r u t a N f o t n e v e e h t n i s n a o l f o g n i r u t c u r t s e R

s t n u o c c A n a o L n o i t a c u d E f o g n i r u t c u r t s e R

s e r u d e c o r P t i d u A

161

14.1.7

s A P N f o g n i d a r g p U

s e r u d e c o r p t i d u A

161

14.2

158

14.1.6

s d r a C t i d e r C

AUDIT OF PROVISIONING s e n i l e d i u G y e K s ’ I B R

14.1.4

149 14.1.2

156

14.1.5

152

14.1.3

146 14.1.1

143 13.2.3

146 14.1

141 13.2.2

139 13.2

138 13.1.2

139 13.2.1

138 13.1.3

137 13.1.1

133 12.2.9

129 12.2.7

136 12.2.10

131 12.2.8

128 12.2.6

137 13.1

S T N E T N O C

I-25

13

14

S T N E T N O C

E G A P

g n i nd ou i lc t c u i xf l i ec o s1 ’e e p R2s 0 r2 r o, e f d 1 krn re u ob s wo t etn mce aOm d r ee Ferl i ‘ t b u raq a d e c ei d r s l ne t p ep us r gsea nAhe i r dwa r ue s g t s nr c s a ueil rrwu t t o S s c l l e r fo i Ro fc

1 ’2 s 0 e 2 s s , e y na i s M u B5 d le l a t ma Sd 0 d. n2 ak r so l a w ue dm i v a i d r nF I ‘ n fo o i t gl u no i r s ue t R c r ue rd t s n e Ru s e i t i m a l a C l a r u t a N f o t n u o c c a n o g n i r u t c u r t s e R

166

n o i t u l o s e R1 r2 e 0 d2 n, uy ’a s EM M5 d Se Mt ‘a fd o 0 . g2 nk i r r uo t w c ue rm t s a e r RF

s t n u o c c A n a o L n o i t a c u d E f o g n i r u t c u r t s e R

PERFORMING GENERAL LEDGER (GL) AND PROFIT & LOSS (PL) AUDIT PROCEDURES k r o w e m a r F y r o t a l u g e R / l a g e L

) s A S ( g n i t i d u A n o s d r a d n a t S I A C I r e d n u s n o i t a g i l b O 3 1 0 2 , t c A s e i n a p m o C r e d n u s n o i t a g i l b O

s m e t I t e e h S e c n a l a B r o f s e r u d e c o r P t i d u A

s l a n r u o J r e f s n a r T f o y n i t u r c S

s t n u o c c A r e g d e L ) e c i f f O ( l a n o s r e p m I g n i z i n i t u r c S

s s e n i s u B d e s a B d n u f n o N

n i s n og i t n c i ad s n ne al r n To ln a i d t n n ea t o g Pi n fd o n ne oL i : t a s r ce i d w no I gP f no i t a s s ue l a c vx EE

s m e t I t n s u e o s c n c e A p x s E s o d L n & a s t e fi o m r o P c n r I o f f s o e y r n u i d t e u c r o c r S P t i d u A

s e i t i l i b a i L t n e g n i t n o C d n a s n o i s i v o r P f o y n i t u r c S

LONG FORM AUDIT REPORTING (LFAR) PROCEDURES

s e r u d e c o r P R A F L

n o i t a t n e m e l p m I e e t t i m m o C i n a l i J & h s o h G

f o n o i t a u l a v E : s n o i t a d n e m m o c e R e e t n t o i i mt a mt n oe Cm he sl op hm GI

f o n o i t a u l a v E : s n o i t a d n e m m o c e R e en t o t i i t mt a mn oe Cm e il n p am l i J I

235

16.4

223

16.3

222

16.2

177

15.3.1

181

16.1

177 15.3

179

15.3.2

176 15.2.4

173 15.2.2

171 15.2

176 15.2.3

172 15.2.1

171 15.1.2

169 14.2.5

170 15.1.1

167 14.2.4

165 14.2.3

161 14.2.2

170 15.1

14.2.1

I-26

15

16

S T N E T N O C

I-27

E G A P

17

s e p y T r e m o t s u C l e s a B f o n o i t a c i f i s s a l C

s l a r e t a l l o C d n a s e i t i r u c e S d e z i n g o c e R l e s a B s e r u d e c o r P t i d u A

s e r u d e c o r P y r a n i m i l e r P

s t h g i e W k s i R d n a ) s e r u s o p x E ( s e s s a l C t e s s A d e s a B s e r u s o p x E d e s a b d n u f n o N s e r u s o p x E d e l i a v a n U

: ) s E S P ( s e s i r p r e t n Ef o re or t c e eh St g cn i l i b t ua Pd dp nU ad n ea t a s r g on pi rt oa CR

SPECIAL-PURPOSE CERTIFICATION

s t n e m e r i u q e R / k r o w e m a r F y r o t a l u g e R

s e r u d e c o r P t i d u A

ISSUING INDEPENDENT BRANCH AUDITOR’S REPORT

k r o w e m a r F y r o t a l u g e R / l a g e L

9 4 9 1 , t c A n o i t a l u g e R g n i k n a B

3 1 0 2 , t c A s e i n a p m o C

s n o i t a l u g e R I B R

- a c i n u m m o Ce c :n I Aa Cn Ir e fv o 0o 6G 2h )t Ai Sw ( d ge ng i r t a i d h uc Ae s no oh st dh ri t a dw nn ao t i S t

n o i n i p O f o m r o F

s t r o p e R t i d u A d e i f i d o M f o s e p y T

e h t n e h w t r o p e r s ’ r o t i d u a e h t f o d te n i ei f t d n oo Cm ds ni an o i mn ri op Fo

h p a r g a r a P n o i n i p O

h p a r g a r a P ) M o E ( r e t t a M f o s i s a h p m E

h p a r g a r a P ) M O ( r e t t a M r e h t O

261

19.1.10

258

19.1.8

256

19.1.6

261

19.1.9

257

19.1.7

255

19.1.5

255

19.1.3

252 19.1.1

255

19.1.4

252

19.1.2

252 19.1

250 18.2

246 17.2.5

245 17.2.3

247 18.1

246 17.2.4

242 17.2.2

240 17.2

238 17.1.1

240 17.2.1

239 17.1.2

238 17.1

s m r o N I I I l e s a B : k r o w e m a r F y r o t a l u g e R

AUDIT OF CAPITAL ADEQUACY

18

19

S T N E T N O C

E G A P

: ) s C O Ms (n so e i t ga nr ae hd i Cs fn o o C mt un da t nr ao r op mm I er Me h gt no i tw i r e WF

:

s C O M ) A M S ( t n u o c c A n o i t n e M l a i c e p S e h t g n i t i r W

SBA 2(9)

) s C O M ( s e g n a h C f o m u d n a r o m e M g n i t i r W

:

h p a r g a r a P ) M A K ( s r e t t a M t i d u A y e K e h t g n i t i r W

SBA 2(8)

g n i u s s I d n a n o i n i p O t i d n uo Ai n ei hp t gO d ne i y i f f i i l d a ou MQ

:

t r o p e R t i d u A e t a i r p o r p p A e h t g n i u s s I

SBA 2(7)

r o f d e r e h t a gs s se e n ce nt ea i dr i p v o Er tp i p d uA Ad en ha t y gc nn i e wi c ei i f v f eu RS

:

- d t e n t t e p n me ee c i c c g i f aA f s una Sah nMr i ao a t t oi b t d Oeu uA od t e y h e t ct i l n r i e e b t df ai nv a I nEn ato i i t d t fu a n o t e eAim ceme i nt L a g ei a ur dg qpen s eoo s r E p np e opmh CAI t

SBA 2(6)

S E R U D E C O R P R A F L R O F D E R I U Q E R N O I T A M R O F N I

:

T O N T S E R E T N I N I D N A S N O IT S I N VU OO RC PC ,A A P) NC N NI I( TD NE ET C ME EL VL OO MC

SBA 2(5)

A M S N I T N E M E V O M F O S I S Y L A N A Y R A N I M I L E R P

:

D E R U T C U R T S E R S T N U O C C A N I T N E M E V O M F O S I S Y L A N A

298

SBA 2(4)

S E R U G I F S S E N I S U B D N E R E T R A U Q R A E N F O N O S I R A P M O C

296

:

G N I N N A L P T I D U A ( S W E I V E R L A C I T Y L A N A Y R A N I M) IL LE EV RE PL

295

SBA 2(3)

S I S Y L A N A E C N A I R A V D L E I Y & T S O C Y L R E T R A U Q

293

:

G N I T N U O C C A F O N O IS TM AE UT LS AY VS EL &O R YT DN UO TC SL YA RN AR N IE MT IN LI ED RN PA

292

SBA 2(2)

E L I F O R P H C N A R B

290

:

) E C I F F O H C N A R B O T ( S T N E M E R I U Q E R F O R E T T E L

289

SBA 2(1)

A M R O F N I G N I K E E S ) R O L ( S T N E M E R I U Q E R F O R E TN TO EI LT

282

:

R O T I D U A S U O I V E R P O T N O I T A C I N U M M O C

278

SBA 1(3)

h p a r g a r a P ’ R E Th p Ta Ar Mg a Fr a OP S’ I R S E AT HT PA MM E ‘ R eE hH t gT nO i ‘ t i d r n Wa

276 :

262 t r o p e R t i d u A e h t g n i t i r W

270 SBA 1(2)

-

:

267 19.2.7

269 SBA 1(1)

268 19.2.8

266 19.2.6

265 19.2.4

264 19.2.2

266 19.2.5

264 19.2.3

263 19.2.1

) M A K ( s r e t t a M t i d u A y e K1 g0 n7 i A t a S ch i n p ua r mg a mr oa Cp 19.1.12

263 19.2

262 19.1.11

I-28

APPENDIX A

S T N E T N O C

I-29

E G A P

SBA 2(10) :

M I L E R P ( D E R I U Q E R S T R O P E R D ) ET TS AI RL EE NV EI T GA MT EN TE ST YY SR SA BN CI

300 SBA 2(11) :

E B O T ( S R E W O) RT RN OE BM EE GG RA AN LA RM OH FC TN EA ER HB S -M T CO AR FF ED GE N AI PA ET NB OO

303

-

S N A O L L I A T E R F O T I D U A R O F T S I L K C E H C

S E E T N A R A U G K N A B F O T I D U A R O F T S I L K C E H C

) C L ( T I D E R C F O S R E T T E L F O T I D U A R O F T S I L K C E H C

332

SBA 4(3)

:

SBA 4(4)

:

SBA 4(5)

:

SBA 4(6)

:

SBA 4(7)

:

SBA 4(8)

:

E C N A T T I M E R D N A E C R U O S T A N O I T C U D E D X A T :

330

SBA 4(2)

328

:

326

SBA 4(1)

323

:

319

D E W E N E R / D E W E I V E R S T I M I L F O T I D U A R O F T S I L K C E H C

316

) C C K ( S N A O L L A R U T L U C I R G A F O T I D U A R O F T S I L K C E H C

310

SBA 3(2)

/ S N R U T E R F O N O I S S I M B U S F O W E I V E R R O FS T TN SE I LM KE CT EA HT CS S E I T I R A L U G E R R I / S N O I T A I V E D : G N I H C U O V E N I T U O R

308

:

F O N G I S N O N O I T A M R O F N I G N I N I A T B O R O F T S I LS KS CE ER HT CS H S A C F O N O I T A C I F I R E V L A C I S Y H P

:

B4

:

B5

:

B6

:

D E T A L E R 9 1 D I V O C R O F K R O W E M A R F N O I T US LS OE SR ET RS

B7

:

N O S A E S P O R C RS OM FR O EN L BN IO GI IT LA C EI F SI ES IS T IA VL IC TT CE AS S 2A XD EE NK N NI AL

358

B8

:

FD ON A N OL IL TA UM LS O, SO ER RC I -M 0F . ) 2 O S KSE M RSS OEM R( WT S ES E M S ADI ER RT P FA R NLE OET IRN T9E U1 M -U LD OI I SVD EOE RCM

346

359

) S W E ( S L A N G I S G N I N R A W Y L R A E

B3

345

CT I .EM T R .

R M E .

WHO C ETI TFN AOA CSL IU I F J I TTD A RT N ES A C H N FO S OI O TH TA AT G MN REE OMH FET ELF VPO I S M TI N A/ O REI TCT SNA UAD LIN LL IPE IMM A ME CO E ICOT :

342

FT I OD TU CA EY PR SO ET RU T NA IT KS RN I OS WE ES MP AA RL FR O NFS OSK I N TRA O CT B AI L A TDI NUC EAR MYE R EO M CT M RU O OT C FA NTF ESO

B2

336 ) EDPC HNUV TAOC FSR( ODGN O SULI NAES ORVS IF I T EM AKL DNHM NAGO EBIC E MFHC MOEN OSHA CTTL C I EE FG RP OI ESSV HANL TLOA IR FAT T OGA EDN NL E O N IN C T EE AOMH TEMT NEOY ETCB TE MI P EMRU L PMET MOHE ICTS

:

334 N O I T A C I F I T O ) NE ( 2 S7 R9 I. AR FS .

F. AG 5 E1 T0 A2 , RR OE PB RM OE CC E FD O H YT R4 T1 SD IE NT IA MD

B1

-

306 SBA 3(1)

APPENDIX B

348

S T N E T N O C

I-30

E G A P

:

B12

:

B13

:

B14

:

C E S ) E M S M ( S E S I RS PE RC EN TA NV ED MA UF IO DG EN MI DR U NT AC LU LR AT MS SE ,R O RCR IO MT

B15

:

TO ET S SG AN ,I N N OI IA TT IR NE GP O CG EN I RN EO MI S OI S CVN NOO IRI NPT O A DC SN I F MA I R R ONA NOL IC LT AAICS TI E NFC I ES N DS A UAV RLD PCA

372 B16

:

TO ET S SG AN ,I N N OI IA TT IR NE GP O CG EN I RN EO MI S OI S CVN NOO IRI NPT O A DC SN I F MA I R R ONA NOL IC LT AAICS TI E NFC I ES N DS A UAV RLD PCA

371

376

-

369 -

368 -

361 -

370 S E S I R P R E T N E M U I D E M D N A L L A M S , O R C I M F O Y R T S I N I M

B11

RE OL FO 6H 0 0W 2D ,N T A CL AI A DT EE MR SF MO N RO EI T DI ND UD A )EN DO OI CT A CR IT NS (I E SGD EE I A TRR I VMT IAE TYL CDA AUS :

9IE 1S T DUA I G VBE OLR CLG FAG OMA NSR O O IDF T N UAD L L OSO SL EAH RUS :DE 0 IR .

2 VH -I T KDE RNH OIT WFN EOI MSN ASO I RES FRI NTV OSEE I RR T DU UES LTES OASO SLSP EEEX RRNE

B10

367 FDE ONH AT N OLN ILI TAN UMO LSI S O,I E SO VR E E U RRR C S I O :M 0 . )P 2 FSX -OEE ME KSS T RSM A OE(G R E WT SR ESEG SG M I ADRA REPR T RO FA EF LT NE O ND IREL T O 9 U1 MH -U LD S OI IE SVDR EOEH RCMT

:

9I 1S DU I VB OL CL FA OM NS O ID T N UA L OS SL EA RU :D 0 I .V 2 -I KD RN OI WF EO MS AS RE FR NT OS I T D UES LTE OAS SLS EEE RRN

B9

. nfs d ms paotee n o c ao ea t sp t os cl i e o r e r gmgdPg n a oLi n g rs Ru t j aA mke a s mrrttnFn o e n o m L e i aTw et ‘ u e r r ae b edeiet n d f b t nte f e a u i epv nm t d sa i maa t nc s ,o hh nas)tuCs L c oonT ne go i r cLaI n ds u o i F sdl e t , d e n (a t ce c m ln a n e c l e nara r o p ame osme r veT p dD.leevt s r i m i Aes urtd n c r due .ba e u b k e p a s nnotc l s i t c aad o e s i rdr bcn e f i p,t r sa n c ae e toae t i d i fcmn p d t n o es ei c un s ad da s nv e au eel od r i dascm t A a e s , r c l i h . ne t a u nt d f cs s . fni uea e nsh e , fh a r e )G r dL eep ys r a -rT.pbmr e p n e o a e C sg mcv aav, o a n o W ar ia r r d(l h ea ln pa nm,tvp e n abaars s ewg t e ot sd i e s’ n l moi i c k gnemgoeHw r n s r nac . o r r ’ o p i l s e bh l ue l d t o n b nas da r f ln su enat a i n od Cial Li di

) s e n i l e d i u g / y c i l o p t i d e r c s ’ k n a b f o e c n e r e h d A (

r e h t e h w k c e h c o T

,s ry e a ynh a wp y am c l i , l t oo r ocp p s n ’ eo k r i n t na a om b i t rr c eoe pfp sns nia i t i ) ed i r en pr u .c e a . t i fa ( eoh ctk nr eod gpn; i e at l ir u d ao , r et ursd e doai p h ye r kr r rf a a s hoc s c yn e r pe ca ee oe ns cb ) (

, ag i mr n oei d t ci l d nro n c ha at on ; de l anc mv an re l a e lln t e ai drnf nfof i aot o tsae i r i l d s e a eap c r bos c t mesn h a e rth r a r nc f u uc mos d,d re e yn s t ca s te i l r n osor hspe sast ( t e’a k sr t n p a i a ms g )b it n l i rp tne i e p d npo eo sr r pa c c ) (

-

b

d e r e h d a n e e b e v a h e m e h c s C C K d e s i v e r n o s. e y l ns i l u e o dl i u u c gi It Be Rm ) (

c

55

AUDITOR’S COMMENTS DESCRIPTION S. NO.

) (

Due diligence and Assessment of Requirements

i

Audit of New Advances

9

R E T P A H C

9.1 INTRODUCTION

-

-

i.e.

9.2 AUDIT PROCEDURES

9.2.1 Agricultural Loans

a

S E C N A V D A W E N F O T I D U A

Para 9.2 S. NO.

56

DESCRIPTION

AUDITOR’S COMMENTS

Reference:

) (

Note: For Activities eligible for crop season linked asset classification norms, see Annex 2 to RBI Master Circular on IRACP dated October 1, 2021, see Appendix B-7 Disbursement and Documentation r e h t e h w k c e h c o T

ii

)

(

FIDD.CO.FSD.BC.No.6/05.05.010/2018-19 July 4, 2018 RBI Master Circular - Kisan Credit Card KCC Scheme

/ t n u o c c a B S s ’ r e w o r r o b o t e d a ; ms e nn ei ee l bd si a u hg ts n ’ ek n ma eb s r r ue bp ss i d a ) ( a

d i a p n e e b s a h m u i m e r p ed cn na a; rs ut sn nu i o pc oc ra c C yC rK oh t a g du no ar h mt ) ( b

d n a d e t e l p m o c y l u d n e e b s a h n os i t a a t h n c eu ms s ud cr oo dc ye r r a n s o s e d cl ee Nh ) ( c

n i e g r d a hn a cl gf no i t e o g na g rr t oo f rm e wd on ra r s od br o c me or re f u nn oe i t v a e r r a l d c n ea dl l a r u t l u c i r g a f o e gy c ai gl t o r op s m’ k dn na ab pr oe rp c , fd o e nr i ou i t q a e cr ef hi t , o d pn ya hl s d r o c e r e u n e v e r d n a l n i e g r a h c f o g n i t o n f i , d n a l f o ) M R S ( e . gr aa gr t t r s i og me r fo b nu os i h t t a i r w t s , i d g e eg r a eg l t p r mo im s Audit Hint: 1. In terms of RBI Circular FIDD CO. FSD BC No. 13/05.05.010/2018-19 dated Feb 07, 2019, no collateral (i.e. mortgage on agricultural land) is required for agricultural loans upto ` 1.60 lakh.

2. KCC facility has been extended to Animal Husbandry farmers and Fisheries for working capital (FIDD. CO. FSD. BC. 12/05.05,010/2018-19 dated Feb 04 2019) 3. Check few account statements for potential transfer of disbursement to intermediary account or to close the existing NPA KCC account, if any.

9.2.2 Housing Loans ) (

S. NO.

AUDITOR’S COMMENTS

Purchase of Plot

r e h t e h w k c e h c o T

i

DESCRIPTION

n ok cn oa t sb df no el p t e n i h ee hh tt a h hi t t rw e t wo ol rp r d oa i bs ee hh t t mn oo re f s ’u n o oh i t a a r t a c l c u et r ds ‘ ) ( a

-

S E R U D E C O R P T I D U A

sd d ’ i e k a t na l au l e( b b p ri y e t a ) p s m n y i lh s g t a ni i w d d o rn i oe r c e k c p a a t h r de c, e d us s n se a v u et ne l r i o h c s t nn m i i s w e i n h en et eo s s i i bt wk sc n ra u a e hrd hb t ’ n s t e e o na t h o a ; rt t ci r oy tf m ii e s , e cb l y r nn ce e i aw) t l m no no i i i d( ‘ pt f ) ( has been obtained Para 2 b of RBI Master Circular on Housing Loans ;

yl l e n v oe sd e i d c nn ea gn ao i ci t i l s b i u uq pc oa t r do ef ds nr ee t d x l ei nu eb ee t ba sv . a id hr n epa cel nhf ato tt no i n f n h e cdm unp sao ) ( RBI Circular No. DBR.No.DIR.BC.13/08.12.001/2015-16 July 1, 2015. ) (

r e h t e h w k c e h c o T

Construction on Plot

ii

-

c

Reference:

ee h ht t yn bi y dt er i no wh ot u da nt an l e nt oe np om i o t ; cd c u l rae t yh s nbi s o ) cds ( rer one o f i w ’t c n o nr aa l r p s o ‘ frb e o f wo yo e pr or m co a abn ) ( a

r nes egye i t t a t i s n ( i a a h i nc r yo l lo t i ro l ia e itp f ho c f i wvr st i ,td; r u e tt oo n n e r s rn se coaad r i e e r l o b so l nth o l t ba oct c l lsiu se ha o t r d e es t e ncr hl hr ht s t , a p n s n t e nemorso mwo b e n ocer ooi l e cfwe l rrt a o t k c o r f n n a ’ouhinpi t s r a b g o e t t t h n nts i i hi b t t i e and t e k o e h l o ewb at nop c t v a ) r s sd tmana e n s a h o t dena h o nnalncll i l , p a l a s f ue n e t e o hi du ae r g st mdl i s c r n hkna et uupo d xn neh cge ie I t t oaec c Bnn i v o e bhk aRiahmetn dftst hla c 3 l f t i o b a neo f n f c h s a h l i a y e a c t s m h ‘ t i r u rl i t ee rh ne s iihou at tpbwwt ) ( b

-

g nn od i cl i fu o b se e h gt af t o s sn o ui ot i c r u a vr t ; s tn n a a dol ecp e i d f he i t t n r t e a o chi t t c sg n a n a hi s d tl r c ie eu p t bs i h fa co r y Anl o t sii c t ’ c k r t u nr s at s bs i ) ( -

c

ey mb id t fe u o sd ts n i n i a g o ; n pi d d e rl n a ii l u a u cbt i eb t ho r t a n pfe o e ae b tt a s aa hch i cf i nt y t ar i e r r bco h ent hou i t t a e yl t bp n e dmt eoe i f cp i t em r ho e t ct c sa e i ht h tt i ) (

d

sged i l nde ss i af i l a umn uo ne dh ee i e v e r i hbg d / nttn f o i o n o ons i t t o a c i dt hu ec lt r a nus s orr n t i t s uo c nbc no sr i ac e s fdd sotn nsnu o e ag r / oa f e l p t tu gs e ne dl p i hnm s . s utao t scc ooe t hd e snj fe uio o kofr lnhop i a / s l g s t e yc n r s l i ue e s a j bs cu o sl or o i nh d cpi ) (

e

)

Para 2 b vii of RBI Circular No. DBR. No. DIR. BC.13/08.12.001/2015-16 July 1, 2015.

( ) (

Reference:

AUDITOR’S COMMENTS DESCRIPTION S. NO.

Para 9.2 57

b

S E C N A V D A W E N F O T I D U A

; d l e h s i y t e i c o s / r e p o l e v e d / r e d l i u b m o r f C O N ) (

; I A S R E C h t i w d e r e t s i g e r n e e b s a h e g r a h c s ’ k n a b ) (

s t n ; s ed mr o uc ce or dn go nd i t l e e l h p s mi od ce e yd be dt l et i t a d en r c a y nc ei eo l bp ss a ’ hk en ga ab ge r t r p os ma ) (

; y c i l o p s ’ k n a b r e p s a e n o d n e e b s a h s t n e m u c o d f o g n i t d t n e va ) ( / y c i l o p s ’ k n a b r e p s a s d r o c e r n. s oe dn l i e l he d ei r u a sg t n n o ei t ma ut cn oe dm ru e c ho t d o ) ( ) (

r e h t e h w k c e h c o T

tes a a hh ; t r t rad re f e e sn wpa i a osdt ran b r d o a oe bt sn e ecwe ab hul r t t -s s e mn ya oo h rcbe g f t n n ’e a g i c d nel i i f bu ii k t asb r t a e r rc h e o dy/ n nt o i urdt n e e pal mo p n ura m cpl o tppc i v ud a ea t ne di l i l o fu b i f t i bc a s ‘ s eno nh ap at s ) ( ed he t n fo o i t tc n n ea ms r ee s r p us ba sy i l d t c ei d r r n ot a s f e s; s bi w y dt a er l i e f e py io t r b r e cpg n spi u a d hl tl i i tu u c ebb t i r eo h h/ ct r td a a n sha ’ t k n n na a ao l bl p ) (

l a v o. rs pd pr ao c me or rn f o yd t l r e e ph oe rr pa s ft o r o ep ge ar lh a c ur da i e s s e e r l t ft i o d en t a a cr i f e i u t r l a e cv ) (

) (

) ( ) ( ) (

Para 2 b 7 f and g of RBI Master Circular.

) (

f l e s r o f d e c n a n fi n e e b s a h e s u o h d. ny ol cn eo s e s ro e p hr t e u hp wn o kt i ca ep hu cc oc To

) ( ) (

Para 2 b ii of the Master Circular.

) (

d e y o l p m e o t d e c n a n fi n e e b s a h e s u o h h c u s r e . hy t l e n ho ws r ke cw eo hr cr oo Tb

Purchase of a house to let it out on rental basis

vi

Purchasing/constructing a Second House

v

r e h t e h w k c e h c o T iii

Purchase of Ready-built House

iv

: n o i t a t n e m u c o D ) (

b

a

c

d

e

a

b

c

Reference:

Reference:

) ( ) (

Reference:

Para 2 b iii of the Master Circular.

y r a u r b e F 2 2 1 2 0 2 / 1 0 0 .

2 1 .

8 0 / 7s .

8n .o o i Nt a .l C u Eg e Rr .t E n Ra Cx t .e R r Oo Df 2 2 0 2 , 8 1

Note: Auditors should refer RBI’s Master Circular on Housing Finance

AUDITOR’S COMMENTS DESCRIPTION S. NO.

58 Para 9.2

S E R U D E C O R P T I D U A

59

Para 9.2

9.2.3 MSME and Priority Sector Loans S. NO. MSME Eligibility

r e h t e h w k c e h c o T

(i)

DESCRIPTION

ngn ni ei o er t be a si dc a fi si hn t Eoo cN Ms Si eE M Mt i rrS o e M h dt r nu e ua p s s nga n oi e i n t d o a i a c t r ic l t n p ld i paa ast n ea ner h ; at 1 d2 oy l n0 fba o d 2 e , nel 2 n a oi s i y t m e l a l u cao J fix h d e i we s y s l t ea a u l hd dt c ) ( a

sr do ri or cp ed r e r ne ot s ni eg ke ar t e ns eo eh bt n sa a h ht rr e e bh mt o u( Ns nr e ow i . t ) o a 0 r2 r r t 0 o2 s i b, g eE0 RM3 e mSn aMu yr J do o Uf t ) ( b

Reference: (i) Classification of Enterprises:

(In terms of Ministry of MSME, GOI Notification S.O. 2119 (E) dated June 26, 2020)

) (

An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:

) (

i a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;

) (

ii a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and

iii a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

(ii) New Definition of Micro, Small and Medium Enterprises- Addition of Retail and Wholesale Trade:

Ministry of Micro, Small and Medium Enterprises vide Office Memorandum (OM) No. 5/2(2)/2021-E/P & G/ Policy dated July 2, 2021, has decided to include Retail and Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they would be allowed to be registered on Udyam Registration Portal for the following NIC Codes and activities mentioned against them:

45 Wholesale and retail trade and repair of motor vehicles and motorcycles

AUDITOR’S COMMENTS

S E C N A V D A W E N F O T I D U A

Para 9.2 S. NO.

60

DESCRIPTION

AUDITOR’S COMMENTS

46 Wholesale trade except of motor vehicles and motorcycles

47 Retail trade except of motor vehicles and motorcycles

The Enterprises having Udyog Aadhaar Memorandum (UAM) under above three NIC Codes are now allowed to migrate to Udyam Registration Portal or file Udyam Registration afresh. (iii) Extension of validity of existing registrations prior to 30th June, 2020: According to Ministry of MSME vide Notification No. S.O. 278(E) dated 19 January, 2022, validity of existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period upto the 31st day of March, 2022. Hence, registration of such enterprises on Udyam Registration Portal is not mandatory till March 31, 2022. ) (

MSME Sector

r e h t e h w k c e h c o T

ii

Note: For Ministry of MSME, Government of India Notifications, see Appendix B-12 and B-13.

s a r m re ho t w if o wn r or gt i o na b oc l iE a l p npM oaS i eM t a ho ctt i nt l p on pde ae m ; ndey r ao gl i oc d r l o et el fr a o swd i on tr n ena k eb m cm m a e e n guh e n dl v ti ea ng l i r we on os se ngae lb kn l ie cn e an wv nusa ah ar ) ( a

hrn e kt i as m l i n d 0i a 1M ) oeP t mG iE pr uP M s P ne( ahe otm r l e rd m on f a r dug edo t nr p eaP c,n r co o at i nct eead esrn bEea n S ; sM e C a G I het V lh n K a te r y e nmb t i a syd l t o l i l e o n p r cu e ooms t Ei nt ) ( b

`

-

e e t n a r a u g d n a E M S T G C r e d n u dd i ea r p e vn oe ce nb es ea bh se a e hf ) ( c

Reference: ) (

Priority Sector Loans r e h t e h w k c e h c o T

iii

)

(

Master Direction FIDD.MSME & NFS. 12/06.02.31/2017-18 July 24, 2017 Updated as on April 25, 2018

e/n hne t oe yib bt c ee dj v ee a rh n/ i a n. t oc n i t i t e a c mnf , nao e esr , t ep e bi h se a ct hes n dro rfs ooa cee et r ar cdh i n et i ohw rt t c nt i ee n l e e r /em, r he d e e ws t d s rr , i u k g o b ens c r aie abd r ) ( a

gs t ni i ; s n d e ot e i t a u n cs s ei n i mu n e nme omb i t os a a cch i l k, p t pnn a ab a c n l i aep ohp t l ha rc e oi h f ht t o w n ent g mi h n et i t gi i dwr etw l win m i oi n nl o kei cm s ai i c nte aad ) ( b

S E R U D E C O R P T I D U A

d nn ea g; ae l gb na i l t i c ea pv sa ne i d l la a om t s dd er co uc de or rh pc u ss i d ro on f ci e, r t / n r e e t m s i m g eo r c hs , ce ui sc ) (

no ot i p tu c es pn sa no i / l s r e o gt r c a e hs cy t er i co i v i r r p e s n o d e i v e dl nn ae de eb e t a v l a e ( h. r 0 s0 ne ag 0 or , l a5 oh2 nc ) ( )

)

Master Direction FIDD.CO.Plan.5/04.09.01/2020-21 dated September 4, 2020 ) (

r e h t e h w k c e h c o T

r reo uhf t pf e l lo b a i neg oi vi i tc e tl a s ce upa dsd e e er r rr e oid f ss i e ss n l a ro uuc don i ce v i l e d a nnb i s oa i ot t ah , hct kon avu l 0gor ; n m 1i o dat c oude l e t c s p n n y ui o t i i sc t se r ns o nr i ao ap op s l ) ( y l t c e r i d s. d nl oe i th u e t i r t a s ns i t r lo a p ne or i t f a co us e di ep o oc t dd en s a r s uu bt sc i e d p ns eo er bp sd a n ha ) (

d e m i a l c n e e b s a h ) S I S C ( y d i s b u s; s te s e s r a e c t e n l i b ri og t i l c ee s n li a y r l t e n m ei Ct ) (

r e d . ny ul e tt n a ei r mp to r r a p pp ea dr to n f ed me t nn ru e vo oc c Ga s mi ot rn f u do ec vc i a e ce eh r t yn di i sS bI uS sC ) (

fe oe t n ea mr d ean hua cGa ; St i id ddn neI r f uC o Fl t an ene eo t im nt n aar rNe afv uo o G)G L f tEo i S) d eFT rGF CC G r(C enN da( o nl t un s u or di etT ra ecd vun odu cEF ) (

h.dn a ei gi o udtt a onc a rIi c i hfn l t oup d mp t a en t u emd o oe m t c rn . e k l yr n l eepa i r vbmB oo lo t l ce Gi a d wyh nf lt n aonui ods m)i ft to nPc n eLete eVjpm e i b(r e u l/c ea c neo vt r o ar d i f hot o c g sPn n si nia y om t sar i t x,do a p a y 5p cL l i 1u l l a p pa ns m i y ad h h rt t li oi i l VNww A ) (

) (

. r a l u c r i c S I S C r o f

1 2 0 2 , 5 1 y r a u r b e F f o e m e h c s n a o l n o i t a c u d e l e d o m s A B I ) (

’

b

) (

Emergency Credit Line Guarantee Scheme (ECLGS)

v

Education Loans to Priority Sector

iv

ad hoc

d

` In the case of eligible priority sector loans to SHGs/JLGs, this limit will be applicable per member and not to the group as a whole Reference:

-

`

a

b

c

d

e

f

Reference:

a RBI Master Direction FIDD.CO.Plan.1/04.09.01/2016-17 July 7, 2016. Visit http://mhrd.gov.in/scholarships-education-loan-4

To check whether

(a) Facility has been extended to eligible borrowers, (i.e. borrowers whose accounts have not been overdue for more than 60 days as on 29.02.2020 or 31.03.2021);

AUDITOR’S COMMENTS DESCRIPTION S. NO.

c

Para 9.2 61

S E C N A V D A W E N F O T I D U A

Para 9.2 S. NO.

DESCRIPTION (b) Facility has been extended within maximum cap under various versions of the ECLGS; (c) Repayment period for interest and principal has been allowed according to the scheme; (d) Working capital cycle has been reassessed appropriately; (e) A separate loan account has been opened for ECLGS; (f) Sanctioned by 31.03.2022 and disbursements to be made by 30.06.2022; (g) Interest rate has been applied appropriately subject to a maximum of 9.25% per annum; and (h) All other scheme guidelines have been adhered meticulously.

Reference: For details, refer NCGTC operational guidelines on ECLGS updated October 20, 2021 and FAQs dated 28.12.2021. u

Scheme provides 100% guarantee coverage for the GECL assistance of loan outstanding as on 29tth February, 2020 or 31st March 2021, whichever is higher, to eligible borrowers, in the form of additional term loan/working capital term loan facility and/or non-fund based facility.

u

ECLGS 2.0 refers to the scheme for borrowers in the 26 sectors identified by the Kamath Committee report dated 04.09.2020 and the Healthcare sector whose total credit outstanding (fund based only) across all lending institutions and days past due as on February 29, 2020 was above ` 50 crore and not exceeding ` 500 crore and upto 60 days respectively.

u

ECLGS 3.0 refers to the scheme for borrowers in the Hospitality (hotels, restaurants, marriage halls, canteens etc.), Travel & Tourism, Leisure & Sporting and Civil Aviation (scheduled and non-scheduled airlines, chartered flight operators, air ambulances, airports and ground handling units) sectors.

u

Interest Rate on GECL under ECLGS 4.0 for loans upto ` 2 crore to hospitals/nursing homes/clinics/medical colleges/units engaged in manufacturing of liquid oxygen, oxygen cylinders etc. for setting up on site oxygen producing plant shall be capped at 7.5% p.a.

u

Exception credit card/savings account/current account over dues did not exceed 1% of the loan amount

62 AUDITOR’S COMMENTS

S E R U D E C O R P T I D U A

63 S. NO.

Para 9.2

DESCRIPTION

AUDITOR’S COMMENTS

u

Term ‘Business Enterprises/MSMEs’ would also include loans covered under Pradhan Mantri Mudra Yojana (PMMY).

u

Business Enterprises/MSME borrower must be GST registered mandatorily This condition will not apply to Business Enterprises/MSMEs that are not required to obtain GST registration.

u

It is not necessary that the existing loans should be covered under the existing NCGTC or CGTMSE Scheme.

u

As per decision taken by NCGTC on September 08, 2020, the stipulation of second charge has been waived in respect of all loans up to ` 25 lakh outstanding as on February 29, 2020 plus loan sanctioned under GECL.

Check-point

ECLGS 1.0

ECLGS 1.0(Ext)

ECLGS 2.0

ECLGS 2.0(Ext)

ECLGS 3.0

ECLGS 3.0(Ext)

ECLGS 4.0

Reference date for ascertain past due status (NPA or SMA-2) and total outstanding

29.02.

2020

31.03.

2021

29.02.

2020

31.03.

2021

29.02.

2020

31.03.

2021

31.03.

2021

Credit facility eligible under the scheme (% of total o/s)

20

30

20

30

40

40

Max ` 2 crore

Tenor of loan from first disbursement (Years)

4

5

5

6

6

6

5

Moratorium period (Years) for principal amount

1

2

1

2

2

2

Principal to be repaid in instalments after moratorium

36

(Interest shall be payable) 36

48

48

48

½ (Interest shall be payable)

48

54

Audit Hint:

) ( vi

Suggestively, auditors to apply more professional skepticism while verifying the end-use of funds whether funds disbursed have been utilized for the intended purpose only and not transfer to another loan accounts(s) of the borrower, have not been diverted/siphoned off. t i d e r c o r c i m l a i c e p s ’ s r i a f f A n a b r U ) ds nr ao gd nn i e s uv t oe He r ft o s yr r o t f s i y n t i i l Mc i Aa (f

Pradhan Mantri Street Vendors Atmanirbhar Nidhi (PMSVA Nidhi) r e h t e h w k c e h c o T

S E C N A V D A W E N F O T I D U A

Para 9.2

DESCRIPTION a

y l u J 2 r e t f a d e s r u b s i d / d e n o i t c n a s n e e b e v a h s n a o l . h0 c2 u0 S2 ) ( b

Reference: Based upon CGTSME clarifications on FAQs, key features of the scheme are: u The eligible vendors (i) Street vendors in possession of

Certificate of Vending / Identity Card issued by Urban Local Bodies (ULBs); (ii) The vendors identified in the survey but have not been issued Certificate of Vending / Identity Card; (iii) Street Vendors, left out of the ULB led identification survey or who have started vending after completion of the survey and have been issued Letter of Recommendation (LoR) to that effect by the ULB / Town Vending Committee (TVC); and (iv) The vendors of surrounding development/ peri-urban / rural areas vending in the geographical limits of the ULBs and have been issued Letter of Recommendation (LoR) to that effect by the ULB / TVC.

u Sanction of working capital loan upto ` 10,000 to street

vendors

u Tenure of the loan will be maximum of 1 year u Guaranteed by Credit Guarantee Fund Trust for Micro

and Small Enterprises (CGTMSE)

u The Scheme is available to all street vendors engaged in

vending in urban areas as on or before March 24, 2020.

u On timely or early repayment, the vendors will be eligible

) ( vii

AUDITOR’S COMMENTS

; y l n o s r e w o r r o b e l b i g i l e o t d e d n e t x e n e e b s a h y t i l i c a f sd i h n Ta ) (

S. NO.

64

for the next loan with an enhanced limit of a maximum of 200% of the earlier loan, subject to a ceiling of ` 20,000.00.

r e h t e h w k c e h c o T

Loan Guarantee Scheme for COVID Affected Sectors (LGSCAS) yp l u n og si n r t e t we os rr r o of br et o l b c i e g s i l e e or a t c g dh n el i dt d nan eea h t p x ex eh e nt e / eng i n bs i st z i a cn er hj yo e t r d i l po i c e m al f b r sg i o i h i f lo Te ) ( a

i.

/ s e g e l l o c l a c i d ; es e mr /t sn c e i c n i c l i c t /s so e n i rg aa i sd n/ es pb s a il d /y sg l o a l t o i p h st oa hp

ii.

/ n e g y x o / s e n; i s c e cc ai vv e fd o l ga nc i i r d ue t c am f y ui t nr ai o mr p r/ os f r o st e a il t i i ln t i c e av f . s e i t i l i c a f e r a c h t l a e h c i l b u p

y a M 7 r e t f a d e s r u b s i d / d e n o i t c n a s n e e b e v a h s n a o l . h1 c2 u0 S2 ) (

iii.

b

S E R U D E C O R P T I D U A

65 S. NO.

DESCRIPTION

Para 9.2 AUDITOR’S COMMENTS

Reference: For scheme details, refer NCGTC operational guidelines. The scheme shall provide guarantee cover to both brownfield projects and greenfield projects, subject to a maximum loan of ` 100 crore per project. The guarantee cover provided by NCGTC would be 50% (75% in case of projects coming up in aspirational districts) in case of brownfield projects and 75% in case of greenfield projects.

r e t p a h C e e s y l d n i K , n o i t a c i f i r e v n o i t n e v b u S

. ’ s e r u d e c o r P n o i t a c i f i t r e C e s o p r u P l a i c e p S ‘ ­

Note:

t s e r e t n I E M S M r o F

“Eligible borrower” means existing units proposing to expand/diversify/set up eligible projects or new units setting up eligible projects in areas other than the 8 metropolitan cities.

The 8 metropolitan cities are municipal areas of Ahmedabad, Bangalore, Chennai, Kolkata, Mumbai, New Delhi, Pune & Hyderabad cities.

9.2.4 Multiple Banking Arrangements ) (

S. NO.

Sharing of Information r e h t e h w k c e h c o T

i

DESCRIPTION

t dni eid nse oir t i ic t rg c ; nen d ie avl e s i r n ai ge va nh at i l w b i e a vrro a n aos e s r r e eb e w we o ov r ra r r o oh , b bs g rk i n e n i ha t t s b i tr x a e h e m th oset rego e f d m npeo l ouw r i f R t o a s f r ne o a i k t l s i c r t l i i ei e c dmh a itf al ) ( a

five crore and above

fr o e h tt c uo dh nt i ow cd ee hg t tnd a u n h a oc bx ; s ae l a tnv a er me e t rbn o i s f a y dhl r ese tt bn i r r ua c ou s e c q r ct pa a ’t ns i r s nea e owl i o t t ra a r mo s rbk oe n f a hb n t i ) ( b

e g n a h c x. ed ge t na i d r ro a p gr eo r c n si t n n ee me eb ee r v g a ah n, an o oi l t na i m er s o uf an l i c t i ed l b e ac r t i f u so ) ( c

Reference:

) (

Certificates/Reports r e h t e h w k c e h c o T

ii

RBI Circulars DBOD.No.BP.BC.46/08.12.001/2008-09 dated September 19, 2008 and DBOD. No. BP.BC.94/08.12.001/2008-09 dated December 8, 2008.

ty as r yoo C t l u b art a ro ; t d e s l f t e e s n r uh ao pt e ir nr ,u l aa a novn ocfe c i m s Aoi s e c e ce dn f e o p rras i l e pt r p e rm aa p yhos bCca e ,gu n ny i g ord a i o rv t t a a e g cr n i cei f r e i s t ,n St r e ni o cyat tp rnnr a i ap u l c o u s mc e goc r eC Ap r ) ( a

AUDITOR’S COMMENTS

S E C N A V D A W E N F O T I D U A

b

n o i t a m r o f n i t i d e r c a d mn oa rI ; f B eR l b h at l i i a vw ad e er r e a t s s ti g r e or py en r a tp i d m eo r c c ) (

/.

AC CB /.

SP. CB9 0 .0 mo2 oN, r.0 f D1 y dOr e a vBu D i e r crb ea e ru l F d nce ert eia bCd sI9 aB0 hR8 f0 ’o t 0 r 2 o / ps1 em0 r re 0 .

2 et1 c . nn8 ei0 gA/ i 0 l M1 i d C1 ‘ ) (

) (

r e h t e h w k c e h c o T

e v a h s t n e m u c o d t n ; at va em l r e o r f hd t e i b wi r c gs ne or l p a n ni od i t e a n ci i a l t p pb ao n ne ae ob l ) ( ; d l e h e r a s g n i t e e m m u i t r o s n o c f o s e t u n i m f o s e i p o c ) (

d l e h e r a d e g r a h c s e i t i r u c e s f o n o i t c e p s n i d t n n i a o ; j s nd or o sc t r e or pn eo r ) (

. y l s u o l u c i t e m d e i l p m o c n e e b e v a h s m r e t n o i t c n a s r e h t o l l a ) ( d

) (

r e h t e h w k c e h c o T

s n a r t y r e v o c e r f o e r a h s r i e r ho t tk e n ga ob t d da ee gl ne ah r t r a m no er ef bd se a r he r tf i ) (

r e f s n a r t e h t r o f k n a b . dd al ee l h es hi t y r me ov ro f c te n r ef s no oe r ca sh s s e r r i pe xh et nf ao ) (

r e h t e h w k c e h c o T

r o b f o r e v o e k a t r od f n ya ct ; i l n o pe dm em vo oc r, pt po an f di rs a t on bu ao c sc a a hl ka nw ao br ) (

s se nv at i r c te ei r hd t I mB o rR f r de ep ns i a a t t b a om nr eo ef bd e sb a i hr c ns oe i r t p a . mny ris l oku f no n al i u tbc i ri d oe t er r em Cf ) (

-

b

-

a

-

a

AUDITOR’S COMMENTS

DESCRIPTION

S. NO.

) (

Adherence of Bank’s Policy and Exchange of Information

i

Collecting Share of Recovery

ii

Appraisal and Sanction

i

AUDITOR’S COMMENTS DESCRIPTION S. NO.

AUDITOR’S COMMENTS DESCRIPTION S. NO.

66 Para 9.2

c

9.2.5 Consortium Arrangements

a

b

c

b

Reference:

As per para 4.2.8 Advances under consortium arrangements of RBI MC July 1, 2015 on IRACP. RBI circulars DBOD.No.BP. BC.46/08.12.001/2008-09 dated September 19, 2008 and DBOD. No. BP.BC.94/08.12.001/2008-09 dated December 8, 2008

9.2.6 Takeover Accounts

S E R U D E C O R P T I D U A

) (

Reference: Para 3 b of RBI circular DBOD.No.BP.BC- 104/21.04.048/201112 May 10, 2012.

Audit Hint: Refer bank’s takeover policy/guidelines. Closure of account with previous bank and opening of account with new bank simultaneously would also tantamount to takeover. ) (

r e h t e h w k c e h c o T

d e s r u b s i d ; dk nn aa db ee nh ot i f to c ny ai c s l no ep er be ep vs aa hl e sv t n e l ue ot ca cr i ap ro e r vp op ea kt aa t ) (

I B R / y c i l o p s ’ k n a b r e p e d a m n e e b s a h d tn n ea ; ms e ev s i r t uc be r si i d d ) ( y l u d n e e b e v a h k n a b s u o i v e r p h t i w d e g r a h. cd e sr e i e t d i r i s un co ec s ) (

r e h t e h w k c e h c o T

e r a d n a d e v i e c e r e r a s e i t i l i c a f l a ur so a cf y rl l oa f i r se ns od i t e a d cr i l o p c pe ar ) (

s t n u o c c a D C / B S n i ) D O T ( t f a r d r e v O y r a r o p m e T

) s t c e f f E d e r a e l c n U t s n i a g A s g n i w a r D ( E U A D

u

s t i m i l D O / C C n i s s e c x E

u

/ L O T

t i m i L

u

r r) ode e f p w yo d l l n e ls oa dnu e ee n e wb e oe l l vb a ae nhv esa h eg bi ns sw r a e haw sro d e p d ue g qt n ei i hmd cl in gd e l nn i ay r a sr era( l e n c ; oy mi to c ti s nteo l s r i c a u p s gci s aed ’ k t dn m i in mr a ip ab l ) ( Ad hoc

u

d et du no t eo t x en h sg e i u t i o l i h c at f , ) s ht cs ue su q le l a r rc oi f n do eh np i e a l t e n t i / a l a mr d n eoa r g a ; ng si n ddi u rl d oc n cn a ei t r (s ) (

-

c

AUDITOR’S COMMENTS DESCRIPTION S. NO.

) (

Application Form : Appraisal

i

Sanction and Disbursement

ii

AUDITOR’S COMMENTS DESCRIPTION S. NO.

Para 9.2 67

a

b

c

9.2.7 Casual Facilities (TOD/DAUE/Excess/Ad hoc)

a

b

Ghosh committee recommendation 2.13

p u d e w o l l o f d n a d e z i r a i d e r a n o i t a z i r a l . n u o gi et r a ri z or f a sl e u t g a e dr er uo df ) (

d

c o h d a

. g . e (

)

c o h d a

Audit Hint: Obtain system generated report on TOD and excess/ , and comment if no such records maintained. Alternatively, maximum debit balances in account turnover reports ATOR menu report in finacle , can provide information on excesses/ allowed during a given period.

S E C N A V D A W E N F O T I D U A

) (

r e h t e h w k c e h c o T

d cdel e pe nv ai mh e s e or cc ge a nr os i ntn d edo ue l ei c t t nbra e o i c v pf i sa r et i e hr w na s l er oa ed pv n yoba e r r pvn a npai o oaht i cya t i t c e i n i r r f oo c i hh t s i a pt d eur l ar de to nt ohnf e y yc t t ei i ; bher p s d sw or m h nro t o oc of u c i ae t s m c r t n no n oe n ai rt o s tf ) (

f o e c n e r e h d a g n i r u s n e d e: w o, l ll y a s nu eo el bu c ei vt ae hm sy e c i t i l io l i c p as f ’ hk cn ua sb ) (

s gt nn i d u no ac t c s a dy ex l i o a r f p t s n ui j d d e ak or t a sp t n s uI oM c cE as Da Ch /c u ; Bs d S) e s nI d i r S d( o es c wne oor i l y t l l c a u ud sr Dt e sr On Ti a ) (

sr t a n l uu og ce cr Ar i / g) aA l F M dS e( Rs t nn i u do ec wc oa l l a n o ti o t nn e em r a l a d i n c ea ; ps st // n s )u s Ao e cFc xRc a e( ) (

fd o e t er s o i c p r e e r xd en na i yd t e i r d or ho t c u e ar gn e ne i n b oe i t v c na ah; s s s r ye e i bw t i ,o r y o nph ayt fr u i a a , n s r noe i ot h i eg t r a i c l h o s i i o d v t ) (

r e h t e h w k c e h c o T

s yee t vr i au r uhd c e d ee c s o wr ,o d p l ol i ah r c e s u pe is t ,l i t d in n c ua a of s s mle aan u sc t a e cr (hr mco u c es r t d r s o n of y a f s ; )dd e nt e i i e f i t sar n nre e otvm s i e t yu r l a e u ct c i do f n i i nd d de e on er ma ba ) (

e r a s t r o p e r d n a d e r u t p a c e r a s n o i t a c i f i d . s od mr o hc ce ur sn fo o d sl g e oh l ) (

b

e.g.

a

ad hoc

e

/ s s e c x e s u o; i d v e ez r i r pa el s u og he r w/ sd r e e m wr of i rn r oo bc oo t t gn ne i r wa o l l a t o n u

s r e w o r r o b o t s t n u o c c a t n s ee r i t r i ui l cc a nf i DD OO T/ gC nC i wg n oi l l y a o tj o n ne u

e.g.

b

d e n e p o y l w e n n i d e w o l l a t o n s y a d 5 1 n a h t e r o m r o f s s e c x e g n i w o l l a t o n u

Ad hoc

u

/ s s e cs xt En /u o Dc Oc Ta

li s a , us se a i ct i r go nh i t wu oa l l t an ft e o e sp nm oo i t c c ay hb cn no ai t r ba m gr nf i i r n r o e c f e d; r d rne oan s f i e a di t t ri n li oi cc a ea r fm ) (

Refer bank’s credit policy for allowing such casual facilities and for discretionary powers.

) (

Modifications in computer systems

iii

Sanction by Competent Authority (within Discretionary Lending Powers) ii

-

a

AUDITOR’S COMMENTS DESCRIPTION S. NO.

68 Para 9.2

-

c

ad hoc

d

f

Audit Hint

S E R U D E C O R P T I D U A

) (

r e h t e h w k c e h c o T

s e n i l e d i u g k n a b r e p s a d e s s e s s a n e e b s a h t i m i l D O ) (

r a l u c r i c s ’ k n a b n i d e t a l u p i t s s a s. nd ol e i l ti i f d l nu of cy l yu r od t n a de ne ab e mv la l h a ) ( ) (

r e h t e h w k c e h c o T

s ’ k n a b r e p k n a b e h t o t e l b a t p e c c a s i d e g r a h c y t r ; y e c pi ol ro pp ) ( dg n ei vn oo ri pt pc an a ss ’ k n/ aM bB y by eb nd oe dv no er ep bp sa a hn e ye t r b e p os ra ph fd o y nn; oat i i r ro t e a h ut ul l au a vva ) (

; os t d p r uo c se e r t a n co i f n i t e r k e a ct en ce ne ab r e bv ma uh cn o ni et a n e or nc /e s g t a r g ot pr eo r m hf co r e a t ea s dd ee l n t ha i t t ) ( l a v o r p p a m o r f y t r e p o r p f o . es gd ar lo a c ue dr i n so e r d fe l o h se e t r a a cr i f e i u t r l a e cv ) (

r e h t e h w k c e h c o T

p) ; aI A hS t i wR E dC e/ r C e t o s R i g / er r a / r os t t i g de er i f i b t o u nS n e e( by si t a r ho h et gu r a a he t ca sr i ’ k p no ar bp ) (

t’ rni s e k visn o d oe pa gd e b nr d y i ofb d co ne ) . e ar c t hn t a e fe dr o ege eb nb msi nm ia t o u dhi n,tn aeni o g e ea l mo t g( a f t dr , rs ,oe d y t s ami ed e drg n oeda f r e ; l ,ket s l e i a gngt aaafi c g o i gbt f t tf r e i r s o ohoo d mtmp o e e ez ft l dr o i sdbl eo a e l t i e th ii a du tt t e fqo fu do e a ) (

yn t o r e n pe ok ra pt n ne oe sb e e uv da yh r ) y ot t i u c t i r a t t c s e ll l e a , fx o a t tr n e et ma yw ax , pa rt oe f s. sus t od p h r i o e c c e e r r ( ) (

e.g.

c

i.e.

b

-

e.g.

a

) (

Reference:

As per para 2 b 7 f and g of RBI Master Circular on loans and advances: Statutory Restrictions ) ( ) ( ) (

Refer bank’s credit policy/master circular of the scheme for eligibility of loan, repayment schedule and other terms and conditions.

) (

Bank’s Charge on Property and its Registration

iii

Property Charged : Adherence of RBI guidelines/Bank’s Policy ii

Assessment of credit limit i

AUDITOR’S COMMENTS DESCRIPTION S. NO.

Para 9.2 69

9.2.8 Loan Against Properties (Mortgage Loans)

a

b

a

b

c

d

Audit Hint:

S E C N A V D A W E N F O T I D U A

) (

r e h t e h w k c e h c o T

en ce i e o vb ne i v aa mh r, c ot f e r e y pi c l go np i n s i ’ a k t n b oa b srd a n e hpa c ; n y ui l sg s r u ,a s o l mmu rdc e i t nt nae oem i l tc d c ie nh r aee s vh l d fa lo a ) ( . . s r e i l p p u s o t y l t c e r i d e d a m n e e b e v a h s t n e m e s r u b s i d ) (

ro e h ht t e u ha / we kr cu ec t ha Cf u n a m e l c i h e v n i e d a m n e e b s a h t n . r ee ma l ee s d r ud be sz i i d r ) (

r e h t e h w k c e h c o T

: s d r o c e r n o n e k a t e r a d e i f i r e v y l u d s t n e m u c o d g n i w o l l o f ) ( u

e h t o p y h s ’ k n a b h t i w ) C R ( e t a c i f i t r e ce s nu o a il t c a r n t s o i i t g a ec r

t r o p e r n o i t c e p s n i

u

e s u a l c k n a b e l b a t i u s h t i w e c n a r u s n i

u

e s n e c i l g n i v i r d d n a e l c i h e v e h t f o s y e k e t a c i l p u d

r e h t e h w k c e h c o T

; s k n a b r e h t o f o s R D T t s n i a g a d e t n a r g n e e b s a h n a o l o n ) (

s ea r a h ) sI t i O s oR p( es t de r ee ht t n fi i f ,o d e et na i r a t d b on a ; syl y i t g nr n a op i i d t r a d i o rc c i nh c uta nfd eoe r eg fmr o a ah rnc e en t t he e t l e nb ai ) (

a

f o t n e m e g d e l w o n k c a h t i w g n ot . l a n ee cm i y o a vp nf i o ft o p i ye pc oe cr

s e n i l e d i u g s ’ k n a b r e p m r o f r e f s n a r t O T R . dd ee nn i ga i s t b ko ne ar l b a ) (

b

-

u

a

-

Refer bank’s policy/master circular on scheme.

AUDITOR’S COMMENTS

DESCRIPTION

S. No.

) (

Adherence of Bank’s Policy/Guidelines

i

Documentation

ii

Disbursement : Adherence of Bank’s Policy/Guidelines i

AUDITOR’S COMMENTS DESCRIPTION S. NO.

70 Para 9.2

9.2.9 Vehicle Loans

a

Audit Hint: b

b

u

Audit Hint:

Refer bank’s policy/documentation guidelines. Check whether vehicle inspection report by branch has been compiled in bank’s prescribed format.

9.2.10 Loan against Term - Deposits

Practical Workbook For

Bank Branch Auditors AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO PAGE NO. BINDING TYPE

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Description One-stop-reference manual cum audit notebook (with Hints & Check-Lists) for statutory branch auditing with complete & current contents. This book is written to reduce the audit risk, besides documenting the audit work simultaneously.

This book is helpful for branch auditors in accomplishing their branch audit more purposefully & bringing more comfort to the Statutory Central Auditors, Boards and Management.

The Present Publication is the 6th Edition & amended up to 1st March 2022, authored by CA Ishwar Chandra, with the following noteworthy features: u [New Chapters] have been added in this book, which are as follows: n Audit of Provisioning n Audit of Resolution of Stressed Assets n Audit of Restructurings including the following: l Agriculture l

u

u

u

u

u

MSME Advances covering RBI Resolution Framework – 1.0 & Resolution Framework 2.0

[Complete & Current Contents] n New Directions for Banks on Financial Statements Presentation and Disclosures [30th August 2021] n New Master Circular on Income Recognition, Asset Classification and Provisioning (IRACP) [1st October 2021] n Various other new Directions were issued by the RBI in 2021 [Revised Chapters on CBS Environment] Useful System Generated Reports & CBS reports, which are helpful for the auditors (which are also available in Finacle 10, BaNCS and Flexcube), have been added [Changes made by RBI’s Extant Guidelines] have been added in the following chapters: n Audit of Capital Adequacy n Special-purpose Certifications [RBI’s LFAR Review] has been added in the chapter of LFAR Procedures, which seeks information from banks’ head office and the branches; various formats suggested to collect the information have been modified based upon such new audit requirements [Procedures for Accepting/ Planning/ Performing and Reporting an Audit] along-with audit procedures for Branch Audit/ LFAR/ Tax Audit and Special Purpose Certifications

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