Bank Audit Check List

Go through RBI Master circular

"1.Read proposal document for getting loan and verify if the loan receiver satisfies all conditions -
if conditions are not satisfied the loan is said to be irregular.
2.Get & verify all certificates/schedules mandated by RBI"

  • Get the list of advances & select the high value advances for audit

  • Get the advance files from respective Relationship Managers

  • Read the Proposal/restructuring letter - It will dictate the conditions to be followed to get the loan

  • Check the loan documents to see whether it satisfies the proposal/restructuring letter's conditions

    "For Example: Proposal letter would recommed a D/E ratio, Gearing ratio etc Proposal would mandate a charge on asset - for that you have to verify form.8 for charge registation Proposal would mandate personal guarantee of directors - Verify personal guarantee agreements"

  • Get FFR 1 & 2 reports - Verify opening balance with audited B/s, verify other items with stock statement

  • Get audited Financials and check if the projections given in proposal is acceptable

  • Get Stock & debtors statement - Calculate and check drawing power, Cross verify Drawing power (DP) with DP register

  • Get asset valuation reports & verify whether it is adequate as recommended in proposal document

  • Get inspection report on assets and note any negative comments

  • Get Stock audit report - note down negative comments, match it with the monthly stock statements

  • Get Form.8 to verify charge on assets as mentioned in proposal

  • Get Personal guarantee agreements

  • Get concurrent audit report and note down negative comments

  • Get CBS access & verify the loan a/c balance are within limits

  • Check a/c operation i.e check if there are frequent payments by customers opposed to the withdrawals

  • Get balance sheet & P&L - Match advances amount in B/s with the total advances given by Bank, Do variance analysis for P&L

  • Get Weekly time deposit reports - Check if the bank satisfies requirements

  • Get a report that will be issued on selected Fridays

  • Get various certificates & Schedules (RBI requirement) and get its breakup/match with B/s or P&L

  • Get BASEL schedules & verify

  • Check cash balance (should not exceed prescribed limit), Gold, bonds,etc

  • Fill in LFAR