Cash and Securities Department

National Bank of Pakistan Branch Audit Checklist
Cash and Securities Department Doc. No. 2 November-2018 Page 1 of 38
CASH AND SECURITIES DEPARTMENT
Preamble:
a. The Auditors shall carry out audit & checking of end-to-end processes under the head and gather &
document evidences after a reasonable testing of transactions as per sampling criteria envisaged in
Chapter No-8 of Internal Audit Manual.
b. Each & every outstanding balance/ head of SAP GL, as on date of audit, its break up (entry-wise) shall
be checked & verified as per subsidiary ledgers/manual ledgers with vouchers/supportive documents/
reports / files/Record/statement.
c. Balancing of manually maintained ledgers(if any) shall be checked with SAP GL Balances and the
issues related to manual ledgers and in case maintained in MS-Excel files have been pointed out/
escalated.
d. Control breaches/lapses/violations shall be pointed out with associated risks alongwith
recommendations for management to take appropriate measures/steps to safeguard the bank’s
interest.
Controlled Copy, DO NOT Duplicate For Internal Purpose Only

Index
1. Cash in Hand-Local Currency
2. Foreign Currency Notes
3. Automated Teller Machine
4. National Prize Bonds
5. US $ Special Bond
6. Blank Forms of DSCs, NIT Units, FEBCs, DBCs, FCBCs, FIBs, and Special US $ Bond
7. Stamped & Unstamped Forms
8. Pak Rupees Travelers Cheques
9. Foreign Travelers Cheque
10. Cash and Security Stationery
11. Strong Room and Security Arrangements
12. Physical Verification of Keys
13. Cash Receipt and Payment Books
14. Clean Note Policy(CNP) as per Inst Cir. 66/2015 dated 29.05.2015
15. Forged Notes
16. Insurance of Cash
17. Articles in Safe Deposit
18. Safe Custody of Shares and Securities
19. Postage & Stamps
20. Security Documents (POs, DDs, MTs, TTs)
21. Tokens
22. Branch Documents/Control Documents/Banks Instructions
23. Cash Supplied to & Received From Branches
24. Utility Bills Collection
25. Regulatory requirements for safety & security of Strong Room.

Instructions
Internal auditors are required to understand the standard procedures pertaining to cash and
Security Department through study of relevant material given in SPM and latest circulars, if any.
In order to verify the existence of keys risks defined below, auditors should check / review the
working of branch covering audit period using sample techniques as mentioned in Internal Audit
Manual by at-least adopting the following audit procedure / check lists. The auditors may also
check and highlight other significant areas of concerns as he / she observed during the course
of audit.
Level of
Definition of Risk levels
risk
Observations that can seriously compromise the system of internal control and
data integrity resulted in material financial/ reputational loss required to be
High Risk
considered as High Risk (H). Higher volume of Violations related to Non
compliance of Regulatory Requirements should also be considered.
The control weakness is more likely to result in material loss of the bank's revenue
or goodwill or material non-compliance with the statutory requirements or the
Moderate
Bank’s policies and procedures. Compensating controls are generally not present
Risk
to reduce the likelihood of any such loss or non-compliance. These areas would be
considered as Moderate Risk (M).
- The control weakness less likely to result in a loss of the bank's revenue or
goodwill or non-compliance with the statutory requirements or the Bank’s
policies and procedures (not being a material loss or non-compliance).
However, compensating controls generally exist to reduce likelihood of any such
Low Risk
loss or non-compliance; or
- The observation is more in the nature of a procedural improvement rather than a
control weakness.
These areas would be considered as Low Risk (L)
A - CASH IN HAND – LOCAL CURRENCY
Audit Objectives
1. To ensure that the procedures relating to the cash handling are complied with.
2. To ensure that the procedures relating to chest/ sub- chest are complied with.
Key Risks
1. Instances of cash shortages may be frequent in branch and not have reported to concerned
regional office.
2. Branch may not be in compliance with procedures relating to the cash shortage/excess,
head cashier’s hand balance and surplus cash.
Audit Checklist
Remarks of
Yes / No Risk
Audit Procedures Auditor/Audit
or NA H/M/L
Observations
Verification of Cash Balances
Review the Cash Balance Book and note the H
instances of cash shortages and ensure the following:
1. Whether the instances of cash shortage were
reported to controlling office and appropriate
measures were taken to find out the root causes

of shortage and recovery thereof?

2. Whether the physical cash on hand balances H
agreed with the balances given in the Cash
Balance Book?
3. Does the head cashier make the shortage H
good on the same day of its occurrence? If not
made on the same day, is the shortage debited to
Protested Bills Account under advice to controlling
office?
4. Check excess cash found over counter M
credited to a newly opened account [GL Code:
2050100129 Title: Excess Cash instead of -
Branch Income which will remain in branch books
for six months, after which it will be transferred to
FCD as per Annexure "Ill" for its final disposal in
line with SBP instructions as per Inst Cir No-
22/2016 dated 04.03.2016.
Deposit of Surplus Cash with Chest / Sub- Chest Branch/ SBP
5. Is cash in Chest/Sub-Chest within holding H
capacity?
6. Is surplus cash over the insured limit
deposited with Chest/Sub-Chest/SBP? If so,
obtain the evidence or inquire the reasons if there
is any non-compliance.
Compliance with Procedures in respect of Head Cashier’s Hand Balance
7. Is head cashier’s hand balance matched with H
the figure appearing in the cash balance book?
8. Is head cashier’s hand balance kept in a M
separate box with his key?
Compliance with Procedures in respect of checking of Branch Cash Balance by
Manager / Supervising officer
9. Does branch manager check, at least once a M
week on different days, entire cash balance and
record his remarks on Cash Book (B-52) under his
full signature?
10. Obtain the following Book and Registers and
perform the procedures from Point-9 to 13
 Safeguards against Counterfeit Notes
 Authenticity of Registers
 Special Considerations for Currency Chest
and Small Coins Depot
 Currency Chest Book, Currency Chest Vault
Register and Small Coins Depot Register
11. Is currency chest book maintained in duplicate M
(one copy is kept with Senior Cashier and the other is
in strong room)?
12. Is the currency chest book written by M
Accountant (joint custodian)?(Treasury Rule
Volume I, Page 17-57)
13. Are the currency chest book, currency chest M
vault register and small coins depot register
properly maintained, updated, checked and
initialed by the head cashier and supervising

official?
14. Is the small coins depot register kept in strong M
room?
15. Are Instant verification (IV) markers and ultra M
violet (UV) lamps available and being used as per
Instruction Circular No-53/2014 dated 20.06.2014
for checking & detection of fake currency?
16. To check on random sample basis from the
previous day’s passed cheques(of audit date) that
the usage of IV markers is being practiced in
branches or not. It could be checked from the
marker’s ink spot on the cheques as evidence as
on the fake cheques and on the plan papers the IV
markers leaves no ink lines.
17. To check (in one day transactions as per H
sampling criteria) that branch is not using debit
vouchers in lieu of cheque books to affect
withdrawal from the checking accounts of the
customers.(with exception where it is permissible
under bank's instructions (e.g. Office A/c and
Government Collection A/c etc.) or where special
permission to use debit voucher has been allowed
as per Bank's Policy by the competent authority
(Refer Instruction Circular 51-2018 2018 & 54-
2018 dated 16.05.2018 & 16.05.2018 respecively)
Weekly Physical Verification
18. Review the currency chest book and small M
coins depot register for the audit period and check
the evidence of weekly count by supervising
official.
Remarks of
Yes / No Risk
or NA H/M/L
Observations
Submission of Weekly Certificate to Regional Officer
19. Is weekly certificate Form (F-151) of currency M
chest and small coin deposit balances submitted
to the Regional Office throughout the period under
audit? (Vol-I-paragraph no.46)
20. Select any 10 weekly certificates for checking M
the correct preparation of the certificates.
Quarterly Cash Verification
21. Does Regional Office carry out quarterly cash H
verification?
Reporting to Currency Officer of SBP
22. Are all transactions on the currency chest and M
in small coin depot promptly advised to Currency
Officer of SBP of the area in which branch is
situated on Form TE-2 and F-142 respectively on
daily basis?
23. Timely & correct reporting of transaction
affected at NBP Currency Chest to avoid SBP
penalty on account of violation of SBP cash
management directives as per Inst Cir. 147/2015
dated 16.11.2015.

24. Check the designated chest branch is H

deducting and remitting 0.12% service charges on
cash deposited by the banks on the plea that the
cash balances are being taken as deposits in
accounts of banks rather than surplus cash
received on behalf of other banks as per as per
Instruction Circular No-52/2017 dated 09.05.2017.
Cash Balances with other Banks, Cash Balances Remarks of
Yes / No Risk
of other Banks with the Branch And Arrangements Auditor/Audit
or NA H/M/L
for Collection of Cheques Observations
Verification of Balances with other Banks
25. In case branch maintains account with other
Banks/ SBP, does the branch regularly obtain the
M
balance confirmation slips and statements of
account and reconcile the accounts periodically?
Running Cash Count Activity
26. Whether surprisingly Running Cash Count H
Activity done in the branch during the course of
audit, in order to identify and highlight intra-day
pocketing of cash/unauthorized accommodation to
valued clients?
Check compliance of Clean Note Policy(CNP) as per Inst Cir. 66/2015 dated 29.05.2015
with respect to following directives:
27. Proper cash sorting into issuable and non-
issuable currency notes.
28. Non-stamping of /removing staple pins from
re-issuable packets.
29. Use of paper / rubber band for banding
packets of all denomination.
30. Affixing of SORTED stamp on packets.
31. Facilitation for exchange of currency notes and
coins.
32. Detection and notification of fake currency
notes.
33. Assurance that ATM cash does not have any
fake currency note.
34. Issuance of new/fresh currency notes to
general public as per quota and procedure
prescribed by SBP.
B - FOREIGN CURRENCY NOTES

Audit Objectives
1. To ensure that the correct rates are applied on the sale and purchase of foreign currency
notes.
Key Risks
1. Foreign exchange rates are not correctly applied on the sale and purchase of FC notes.
Audit Checklist
Remarks of
Yes / No Risk
or NA H/M/L
Observations
Checking of Entries in the Register
35. Is cash indent made on bank’s prescribed form H

Remarks of
Yes / No Risk
or NA H/M/L
Observations
and is the form serially numbered, signed and tested
by two authorized officers?
36. Select the entries of material value for purchase H
and sales of FC notes and verify these with the
relevant vouchers.
Application of Correct Rates
37. Whether correct / approved exchange rate has H
been applied on FX transactions?

C - AUTOMATED TELLER MACHINE (ATM)

Audit Objectives
1. To physically verify the “Cash in ATM” and check that the physically counted cash
denomination wise is in agreement with the figure appearing in the ATM Audit Roll.
2. To verify by work back / calculation that cash in ATM match / reconcile with the figures
appearing in the General Ledger.
3. To ensure that keys of ATM is in the safe custody of the authorized officials.
4. To ensure that practice to tally Cash in ATM at each day end.
Key Risks
1. Authorized official may not be observing the head office instructions, which may lead to
misuse of ATM facility.
2. Cash shortages in ATM may have been frequent in branch.
3. Loose control over keys / cash replenishment may lead towards
misappropriation/pocketing of cash.
Audit Checklist
Audit Procedures Yes / No Risk Remarks of

or NA H/M/L Auditor/Audit
Observations
Physical Verification
38. Physically count and note the Cash in ATM H
of each denomination on the date of
commencement of audit of this section, and
ensure that physically counted cash is in
agreement with the figure appeared in the
General Ledger. Physical cash must be tallied
with the figures appearing on ATM Slip, for
balancing of figures appearing in GL auditor
needs to prepare ATM reconciliation taking into
account all the transactions executed after
EOD till the time of physical counting of cash.
Daily Settlement of Cash in ATM & ATM
Reports
39. Is Cash in ATM tallied / settled at each day H
end and reconciled with the figure appearing in
ATM reports?
40. Are ATM reports duly checked and verified M
by the authorized official?
41. Whether the cash replenish in ATMs twice H
a day? (Instruction circular 106/2016)
42. Whether branch ensures availability of H
cash and printing rolls stock? (Instruction
circular 106/2016)
Custody of Keys
43. Is opening key of ATM in the custody of the H
cashier in charge?
44. Are the duplicate key / combination change H
key kept in a sealed envelope with other
duplicate keys packet in the safe of the
branch?
45. Branches maintain log of captured cards/
captured card and keep under dual control in

violation of para a (3) PSD master circular no.

1 of 2008
46. Captured ATM cards were delivered by the
branch with proper due diligence in violation
of para 4, PSD circular no 1 of 2008
47. Captured cards sent to CFC of the bank
after waiting for the customer for two days in
violation of PSD circular no 01 of 2008
48. Details of captured ATM cards reported to
card facilitation in violation of SBP PSD
circular no. 1 of 2008
D - NATIONAL PRIZE BONDS

Audit Objectives
1. To ensure that branch is in compliance with the Govt / SBP instructions regarding the sale
and purchase of NBPs.
Key Risks
1. NPBs are being reportedly sold during the shut period.
2. Non-reporting of unsold prize bonds held with the branches for onward sharing with SBP.
Audit Checklist
Remarks of
Yes / No Risk
or NA H/M/L
Observations
49. Verify the value with the figures appearing H
under the sub-head “National Prize Bonds On
Hand Account” in the GL?
50. Are the general entries for sale and H
purchase of NPBs verified with the relevant
vouchers?
51. Has branch prepared a list of unsold prize H
bonds on the commencement of shut period
and reported the same to HO? Also verify the
relevant bonds on hand with the list prepared
by Branch.
52. Is commission on sale / purchase of new M
prize bonds received from SBP and credited to
commission account?
53. Is the list of prize bond on hand checked M
by branch with the result of draw to ascertain
the prize?
54. Has the prize money won credited to M
commission account or treated as per HO
Instructions?
55. Whether immediately after draw, the listed H
prize bonds held by the branch were matched
with the published list of winners and the prize
winning bonds were duly segregated and
referred to SBP through a forwarding letter
with the request to credit the amount of prize
money payable on the winning prize bonds to
Govt. Account and its/their face value to NBP
account maintained with SBP. (Refer to SBP
Circular no. PBD/U-2-A/6090/Misc./2011 dated

May 17, 2011)?

56. Whether CTR was done by the branch if H
the sale in cash exceeds the threshold limit of
SBP?
F - BLANK FORMS OF DSCs, NIT UNITS, FEBCs, DBCs, FCBCs, PIBs

Audit Objectives
1. To ensure that the documents (specified in the documentation checklist) are properly
maintained, updated, and checked by the authorized official.
2. To ensure that the branch has complied with Government / SBP Instructions.
3. To ensure that all the blank forms are kept under safe custody / dual control.
Key Risks
1. Branch may not be in compliance with Government/SBP instruction.

2. Mis-utilization of security stationery may result into financial as well as reputational loss
for the bank.
Audit Checklist
Yes / No Risk Remarks of

Audit Procedures or NA H/M/L Auditor/Audit
Observations
57. Are the entries in respect of receipt / M
issuance of instruments verified from the
vouchers?
58. Is the register properly maintained, M
updated, checked and initialed by the
authorized official?
59. Are application forms for issuance of M
security instruments serially numbered and
kept in paste file?
60. Are sale proceeds promptly remitted to the H
concerned department/ SBP?
61. Are withholding tax and Zakat recovered H
and remitted to the concerned department/
SBP?
62. Whether Income tax deducted by bank
under any section has been deposited with
Government treasury within 07 days from the
end of each week ending on every Sunday
63. Is the stock of security instruments M
physically checked on monthly basis? If so,
obtain the evidence or inquire reasons for
reporting in case of non-compliance?
the sale in cash exceeds the threshold limit of
SBP?
G - STAMPED AND UNSTAMPED FORMS – STAMP ACCOUNT

Audit Objectives
1. To ensure that practice for balancing stamp account on quarterly basis exists as per bank’s
instructions.

Key Risks
1. Under stamped / obsolete forms may not have surrendered to the concerned treasury for
additional stamping / claim of refund.
2. Practice of balancing the stamp account on quarterly basis may not in place.
Audit Checklist

Observations
65. Is practice in place to balance stamp H
account on quarterly basis in accordance with
bank’s instructions? If so, obtain evidence for
the same.
66. Are under stamped / obsolete forms, if H
any, surrendered to the concerned treasury
for additional stamping or claim of refund?
H. PAK RUPEES TRAVELERS CHEQUES

Audit Objectives
1. To ensure that the documents (specified in the documents checklist) are maintained,
updated and checked by authorized official.
2. To ensure that the branch has complied with procedures and head office instructions.
3. To ensure that all the PRTCs stock is kept under safe custody / dual control.
Key Risks
1. Inadequate scrutiny might have lead to encashment of PRTCs, which were reported as
lost/ stolen.
2. PRTCs may have placed with unauthorized officer.
3. Non observance of dual control may lead towards pocket banking / parallel banking.
Yes / Risk Remarks of

Audit Procedures No or H/M/L Auditor/Audit
NA Observations
67. Whether the physical stocks on hand of the H
PRTCs agree with the quantity given in the
PRTCs Stock Register?
68. Carry out stock count of the PRTCs of each H
denomination on the date of commencement of
the audit of this section and compare these
with the figures appearing in stock register and
general ledger.
69. Circularize the confirmation letter to the
controlling unit (Chappal Plaza Branch) in order
to confirm the quantity and value of PRTCs
held by the branch
70. Are the entries in respect of receipt of M
PRTCs from Chappal Plaza Branch (Controlling
Unit of PRTCs) verified with requisition letters
and vouchers?
71. Are the entries in respect of sale / issuance H
of PRTCs verified with the following supporting
documents and signed by both the customer
and the branch officer?
a) Purchase Agreement (F-617)

b) Debit Vouchers (F-50)

c) CNIC of the Purchasers
72. Are the entries in respect of encashment of M
PRTCs verified from the relevant vouchers?
73. Does the practice exist in branch for M
referring list of stolen / lost PRTCs at the time
of encashment?
Observations
74. Is the amount stated in the sale report M
remitted to Controlling Unit with respective
RBVs on every Monday?
75. Are proceeds of PRTCs encashed by M

branch received from the Chappal Plaza
Branch on the following Wednesday from the
day of encashment?
76. Is the practice in place for reconciliation M
of stock of PRTCs on monthly basis? If so,
obtain the evidence or inquire reasons for
reporting in case of non-compliance.
Controlling Unit of PRTCs (Hasrat Mohani Road, Branch, Karachi)
77. Does the authorized official of the branch M
properly record the stock from the delivery
notes in the Stock Register/ Katcha
Register?
78. Are the details of receipts of the stock of M
PRTCs fed into the system at the time of
receipt?
79. Are the stock supplied to the other M
Branches on their requisition letters and
does the authorized official prepare delivery
notes and maintain these in a file?
80. Are the details of PRTCs supplied to M
other branches recorded in the Stock Katcha
Register and fed into the system?
81. Does the authorized officer thoroughly H
check the following particulars of Mail
Transfer Advice and Fanfolds (F-15) on the
receipt of weekly issuance report from other
branches?
a) Amount of sale proceeds
b) Signatures of two authorized officials
c) Check Signal and verification thereof
82. Are the details of sale of PRTCs by other M

branches fed into the system and the
computer print outs of Issuance Report and
Dak Register taken?
83. Does the concerned official check the H

following before weekly reimbursement of

the amount of encashed PRTCs to
branches?
 Details of the encashed PRTCs
on the prescribed format
 Genuineness of the Original paid
PRTCs Received from the Branches
84. Does the concerned official feed the M
details of encashment into the system and
are the encashment report and encashment
Dak report printed and checked by the
85. Whether the Debit / Credit RBVs H
originated by the TC issuing / encashing
branches are responded very next day at
Hasrat Mohani Br. and no window dressing
of deposits or NBP General Account is
done?
86. Whether PRTCs were credited into the H
account in whose favor the instrument was
issued?
87. Whether single PRTC paid twice by the H
branch?
88. Whether unclaimed PRTCs remained H

unpaid beyond 10 years from the date of
issuance were surrendered to SBP?
the sale in cash exceeds the threshold limit
of SBP?
I. FOREIGN CURRENCY TRAVELERS CHEQUES
A) Issuance of FCTCs
Audit Objectives
1. To ensure that the FCTCs are issued in accordance with the prescribed procedures.
2. To ensure that the physically counted FCTCs and their values are in agreement with the
balance appearing in stock register/general ledger.
3. To ensure the physical security of the unutilized FCTCs.
Key Risks
1. FCTCs are not issued as per SBP / NBP laid down instructions.
2. Issuance of FCTCs may not be correctly recorded in the issuance register.
3. Inadequate scrutiny of FCTCs may lead to fraudulent encashment.
4. Bank’s charges are not recovered as per the latest tariff of Bank charges.
5. Inadequate control may have over the safe custody of FCTCs.
6. FCTCs are issued in excess of the prescribed limit.
Audit Checklist
Observations
90. Carry out stock count of the FCTCs of each H
denomination on the date of commencement of

the audit of this section and compare these with

the figures appearing in stock register and
general ledger.
91. Does branch manager check regularly the H
whole stock of FCTCs and authenticate the cutoff
point for control purposes?
92. Does the concerned official check the M
genuineness and validity of following documents
before issuing FCTCs? Return Air
ticket/Visa/Passport/NIC
93. Does the branch recover bank’s charges as H
per latest tariff?
94. Does the branch maintain serial numbers and M
denomination of FCTCs?
95. Does the branch issue FCTCs after adequate M
introduction of applicant?
96. In case of lost FCTCs, does the concerned H
official obtain the evidence and maintain its
record and report it to issuing office?
97. Does the branch circularize the confirmation H
letter to the respective bank to confirm the
quantity and value of FCTCs held in stock by the
branch?
98. Is denomination-wise stock register M
maintained by the authorized official?
99. Does the branch maintain register containing H
record of FCTCs sold / purchased?
100. Does the branch issue FCTCs within the M
prescribed limits i.e. US$ 2100?
101. Are the entries in respect of receipt of FCTCs M
from the respective bank verified with the
following supporting documents?
a) Requisition letters
b) Acknowledge receipt and
c) Vouchers
102. Does the branch keep copies of the following H
documents in their record?
a) Pages 1, 2 & 3 of the passport
along with the title page and that page on
which endorsement of release of foreign
exchange is made.
b) First coupon of air / steamer
ticket.
c) Visa
103. Is the amount of TCs remitted timely to H
concern Bank (issuer)?
B) Encashment of FCTCs
Audit Objectives
1. To ensure the supports provided by the beneficiary at the time of encashment.
2. To ensure the accuracy of buying rate at the time of encashment.
Key Risks
1. Incorrect buying rates are applied at the time of encashment.
2. Payment of FCTCs may not be correctly recorded.

3. Bank’s charges may not be recovered as per the latest tariff.

4. FCTCs may be stolen.
Audit Checklist

Observations
104. Does the concerned official obtain the H
countersignatures of the beneficiary
before encashing FCTC?
105. Does the concerned official examine H
the Passport/NIC of the beneficiary and
verify the copy of issuance slip of FCTC
before encashment?
106. Does the concerned official apply the H
correct buying rate at the time of
encashment of FCTCs?
107. Whether applicable charges, if any, H
recovered by the branch and recorded
into correct GL head?
J. CASH AND SECURITY STATIONERY

Audit Objectives
1. To carry out count of all items (specified in the audit check list) and verify the balances with
the respective records.
2. To ensure that all items are kept under dual control and custody of head cashier and other authorized officer.
3. To ensure that the currency notes are properly arranged in packets and are in countable condition.
4. To ensure that the branch has lodged soiled/mutilated notes with SBP for claim of new currency notes.
Key Risks
1. Physical balance may not be in agreement with the records.
2. Items may not have kept under the dual control.
3. Holding of high value of mutilated and soiled notes may expose the branch to
misappropriation of cash.
4. Concerned official may not keep the tokens in a locked box in the strong room.
Audit Checklist

Observations
108. On arrival at the branch in the
morning, obtain the Manager’s set of
strong room keys and retain them until the
physical count is completed.
109. Before the start of business, open the
strong room in the presence of the
manager / operations manager /
supervising official and joint custodian
head cashier and carry out physical count
of the following:
a) Cash on hand local currency notes

b) Foreign Currency Notes

c) Small Coins Depot
d) Postage, Stamps and Stamped and
unstamped Forms on hand
e) Prize Bonds
f) Foreign Currency Travellers Cheques
g) Pak Rupee Travellers Cheques
h) Blank Forms of Defence Savings
Certificates, NIT Units, FEBCs/ DBCs,
PIBs etc.
i) Tokens
j) Any other items including Petty Cash
In case of material differences the matter
should be immediately reported to
concern Audit Chief.
110. Match quantity as per physical count H
with that as per records, and resolve
difference if any.
111. Whether above items are kept under H
dual control and custody of head cashier
and other authorized officer?
Compliance of SBP Circular No. Cy-1537-1579/1(Poly)-2002 dated 02-10-2002 as amended
vides SBP BSC Circular No.Cy / 01 / 01 dated 22-04-2003
112. Whether Daily Closing H
Cash Balance Statement was prepared by
the branch? (violation will attract penalty
of Rs.5000/- per instance + Rs.500/- per
day during which the default continues)
113. Whether branch has maintained H
minimum surplus cash balance in sorted
re-issuable balances of at least “ONE
DAY’S” average requirement/payment to
customers for the preceding month?
(violation will attract penalty of Rs.5000/-
per instance + Rs.500/- per day during
which the default continues)
114. Whether currency notes / packets / H
bundles were segregated into issuable /
non-issuable condition over the payment
counters? (violation will attract penalty of
Rs.5000/- per instance + Rs.500/- per
packet of un-sorted / non-issuable
currency notes of any denomination, if
caught, being pushed into circulation)
115. Whether on-spot sorting of bank H
notes over the counter in case where
average daily payments exceed
Rs. 1.500 million, was done? (violation
will attract penalty of Rs.5000/- per
instance)
116. Whether "SORTED" stamps on H
packets of currency notes was found
affixed? (violation will attract penalty of
Rs. 500/- per packet of any denomination

is caught during on-site examination &

Rs.500/- per packet in case any
stakeholder along with evidence of the
same lodges a complaint)
117. Whether branches remove H
staple pins from packets of Rs 5/- and Rs
10/- denomination bank notes and also
properly banding them? (violation will
attract penalty of Rs.500/- per packet)
118. Whether branch was accepting small H
denomination bank notes of Rs. 5/- & 10/-
as well as cut / soiled / mutilated and
defective notes? (violation will attract
Rs.10000/- per case with evidence)
119. Are notes of each denomination M
sorted / arranged in packets of 100 and
bundled as per procedure?
120. Whether Important / Emergency M
telephone numbers were displayed in the
strong room?
Mutilated / Soiled Notes
121. Are mutilated (soiled) / Non issuable M
notes kept separately from other currency
notes?
122. Does the branch deposit the mutilated
and soiled with cash feeding branch? M

Observations
Currency Chest And Small Coins Depot
123. Are the physically counted cash and H
coins (total number of bags and contents
in terms of correct denominations and
genuineness) verified with the figures
appearing in the Currency Chest Vault
Register and Currency Chest Book and
Small Coins Depot Register respectively?
124. Is slip on Form F-140, showing the L
description of coins, duly signed by the
concerned official and is it found placed
inside of each bag?
125. Also obtain the Certificate of Currency H
Chest and Small Coin depot balances as
of the date of the audit from Currency
officer of the area concerned to verify the
balances with the physical count and the
above Registers. Report the difference if
any.
126. Whether the actual number of official H
Police Guards deployed at the chest

branches match with the approved

quantity and their record of attendance
and payment of salary has been
maintained effectively?
Regulatory requirements for safety & security of Strong Room & Cash balances
127. The walls of the Strong Room were
coal-tarred up-to a height of 2 feet off the
floor as per requirements.
128. Chest Vault opened at 8.30 a.m.
129. Police Guard Attendance Register is
maintained properly.
130. Inspecting Officer’s certificate and
DPO’s order was hanged within the strong
room as required vide Para (IV) of I.D
Manual.
131. Holding capacity matched with
volume of transaction of Chest.
132. Balance held by the chest is in
accordance to chest holding capacity
during the year.
133. Chest Balance is not being use by the
Branch for their commercial banking
operations.
134. B-34 & PB-35 was maintained.
135. Sorting of currency notes of all
denomination was exercised in light of
SBP clean note policy.
136. Note Binding and coin counting
machines were in order.
137. Box balance books were maintained
denomination wise.
138. Arrangements for emergency light are
intact.
139. Indent book was being maintained for
supply of notes from Box balance to
counters.
140. Exchange counter was being operated
by the official holding charge of Box
balance and all transactions were
recorded in relevant registers.
141. Balances of the currency chest are
proved and signed at every transaction by
the Officer Incharge of the chest, as
provided in Para 14(ii) of part XIV of
Treasury Rules Volume I.
142. Irregularities committed by the chest
in the last inspection have been rectified
properly.
143. Weekly /Monthly verification of chest
balances were ensured.
144. Annual fitness certificate of Vault for
Fiscal Year was hanged in the vault.
145. Daily /Weekly/Monthly verification
certificate of Chest officer

146. Staff and Branch Management are

fully conversant with Chest Rules and
Regulations.
147. Guard Commander was present at
the time of Vault opening/closing.
148. Position of Police guard was
defined/prescribed as required
149. Register of opening/closing of Vault
was signed/check by Operation Manager
and Branch Manager.
150. All CCTV cameras of Branch were in
order and CCTV cameras were sufficient
to cover entire Branch.
151. Necessary stationary items were
placed within and vicinity of the
Vault/strong Room.
152. Entry register of vault was maintained
by the Branch.
153. Bin book were properly maintained
and signed
154. Fire extinguishers, Buckets of Sand
and water were in strong Room
155. Security alarm system was installed in
strong Room
156. Branch using Currency Chest
Reporting System (CCRS) on daily basis
for submission of TE-2.
157. Walking through gate was installed at
Main entrance.
158. Cash exchange counter was operated
separately by the Branch.
159. All signals Books (Black & Brown
covers) were available in the Branch.
160. The clearing house is working
properly (where ever applicable).
161. Ultra violet lamps/Counterfeit note
detectors in order (At least 2).
162. Weight machine was in order.
163. Vault was properly sealed with
embossed brass seal.
164. Police guard duty was changed on
daily basis.
165. Fire alarm system was installed in
strong Room.
166. There was enough space around the
vault for guard’s patrolling.
167. Insurance coverage was within limit.
168. F-157 was maintained at Chest
Branch.
169. Proper Electric wiring is placed in the
vault/strong Room.
170. Cash was not found short.
171. Cash in vault was cross examined
through surprise cash verifications by the

Manager/Operations Manager at least

three times in a month.
172. Barber Wires were available around
the premises.
173. Chest balances are kept inside the
Almirahs.
174. Prize bond of various denominations
kept in almirahs should be included in the
chest balance.
175. Branch was holding Old designed
notes of various denominations.
176. Standard weights and scales along
with coin counting and note counting
machine are available in the Chest
branch.
K - STRONG ROOM AND SECURITY ARRANGEMENTS
Audit Objectives
1. To ensure that branch has complied with head office / SBP instructions in respect of the
security arrangements.
2. To ensure that security personnel are restricted to their assigned duties.
3. To ensure that the strong room is under dual control of authorized officials.
4. To ensure that all the safety equipments are in order.
Key Risks
1. Safety measures at the branch may not be adequate.
2. Burglary alarm may not be in working order.
3. Security personnel may have found performing operational duties.
4. Unauthorized persons may have access to cash department and strong room.
Audit Checklist

Observations
177. Visit the strong room on the date of
commencement of the audit of this
section and check the following:
178. Is strong room under the dual control H
of the senior/ head cashier and the
supervising official / manager?
179. Are security guards posted at the H
entrance of the strong room?
180. Are cashier’s enclosure safe and its H
access restricted to authorized person
only?
181. Is burglary alarm in working order and H
connected with nearest police station/
house/ shop?
182. Are armed police/ guards found H
standing at a secured place during
counter hours?
183. Are cash counters covered with grills H
and do the railing separate cash

department?
184. Are the back doors of the branch H
closed and properly guarded during the
banking hours?
185. Are guns of security guards loaded? H
186. Has the Strong room/ vaults were H
used for other purposes like store, kitchen
etc?
187. Does the branch hold full set of M
firefighting equipment?
188. Are the installed fire extinguishers in M
working order and not found expired?
189. Is guard posted applying security
apparatus(metallic detector) on every
entrant with politeness and decency?
190. Are telephone numbers of Police and
security company available with the
responsible officials?
Special Considerations for Chest/ Sub-Chest Branches
191. Is authority letter, issued by SBP,
regarding with-holding capacity of the
Strong Room held on branch record?
192. Is valid safety certificate regarding
fitness of strong room available and found
inside the strong room?
193. Has the Chest branch segregated the
branch cash from SBP Chest cash?
L - PHYSICAL VERIFICATION OF KEYS
Audit Objectives
1. To verify the keys of strong room, safes and almirahs with the number appeared in the Key
Register and to ensure that keys are operative, kept in strong room under the custody of
authorized officials.
2. To ensure that sealed packet of duplicate keys is deposited for safe custody in the nearest
branch or any other bank or SBP or with local treasury as per instruction of regional office.
Key Risks
1. The keys obtained for verification may not be in agreement with the numbers appeared in
the Key Register.
2. Keys may not be kept under the custody of authorized officials.
3. Sealed Packet of duplicate keys may not be deposited for safe custody in the nearest
branch or any other bank or SBP or with local treasury as per instruction of regional office?
Audit Check List
Audit Procedures Yes / Risk Remarks of

No or H/M/L Auditor/Audit
NA Observations
194. Obtain all keys of strong room, safes,
almirahs and the ‘Key Register’ and perform
the following procedures:
195. Are the number of keys obtained H
correctly reflected and matched with the

number appeared in the key register?

196. Is the sealed packet of duplicate keys H
deposited for safe custody in the nearest
branch or any other bank or SBP or with
local treasury as per instruction of regional
office?
197. Open the sealed packets of duplicate H
keys in the presence of the manager and the
head cashier and check that keys are
operative.
198. Is it locked in a box and is the key of H
which kept by the manager or
accountant/head cashier?
199. Has the fact of withdrawl /re-deposited M
been advised to regional office?
200. Are duplicate keys withdrawn at the time M
of change of incumbency of the present
manager/joint custodian and head cashier or
at the time of audit?
201. Whether keys are physically held by the H
staff member whose name is appearing in
the Key Register?
202. Whether keys are physically rotated H
during absence / leave of the actual holder of
the respective key and key register updated
accordingly?
203. Whether branch has designated the back H
up of key custodians in such a way that
individuals who have already held one key to
a safe or strong room do not hold the other
key to the same safe/ strong room even at a
later date?
204. Do branch manager and head cashier H
jointly hold keys of strong room?
205. Does the branch manager / joint H
custodian personally operate strong room
with his own keys? (He should not hand over
his key to his joint custodian under trust in
any circumstances)?
M - CASH RECEIPT AND PAYMENT BOOKS

Audit Objectives
1. To ensure that the receipt and payment transactions are correctly entered in the books and
these are supported with vouchers and other instruments.
2. To ensure that the vouchers and other instruments are approved by the authorized officials
within their prescribed limit.
Key Risks
1. Entries in the books are not verified with the supporting vouchers/other instruments.
2. Passing officials may pass the vouchers / instruments of amounts exceeding their
prescribed limits.
3. Branch may not be complying with Prudential Regulations in respect of restriction of cash
payments outside the bank’s authorized place of business.
4. Misappropriation / Pocketing / Parallel Banking.

Audit Checklist

Observations
206. Cast the total of receipts and payments L
of the selected days and verify the totals
with the balances appearing in the cashier’s
receipt and payment books and with the
balances appearing in the cash balance
book / main cash scroll.
207. Are the entries appearing in the H
cashier’s /tellers Journal of the selected
days verified from the relevant vouchers
and others supporting documents?
208. Whether transaction was recorded with H
correct amount and in correct account on
same day?
209. Are the entries appearing in the H
cashier’s/Tellers Journal of the selected
days verified from the relevant vouchers
and other supporting documents?
210. Are the Cashier’s receipts and H
payments books daily balanced, closed and
signed by the concerned cashiers?
211. Are the books properly maintained, M
updated, checked and initialed by the joint
custodian/ authorized official?
212. Do the authorized passing officials pass H
the vouchers/ instruments as per their
prescribed limit? In case of deviations, note
the instances and inquires the reasons for
reporting.
213. Whether supervisor authorized the H
transaction himself/herself on the computer
screen of teller? In case of non adherence
of password sharing instances should be
reported.
Cash Payments outside the Bank’s Authorized Place
214. Does the branch comply with Prudential H
Regulations in respect of restriction of cash
payments outside the bank’s authorized
place of business?
215. Is cash received stamp kept under H
custody of an authorized official?

O - INSURANCE OF CASH AND CASH EQUIVALENT
Audit Objectives
1. To ensure that insurance policy of cash (Local and Foreign Currency) is adequate, valid
and covers the entire cash and cash equivalent at counter and in vault.
2. To ensure that documents (specified in the documentation checklist) are properly
maintained, updated and checked by the authorized official.
Key Risks
1. There might be frequent instances of excess of cash at counter and in vault over the limit
of insurance cover and these so without reporting to competent authority.
2. The insurance limit may have inadequate considering the cash transactions in the
branch.
3. Insurance policy may have expired and is not being followed up with concerned regional
office for its renewal.
Audit Checklist

Observations
216. Is the cash insurance policy valid and in H
force?
217. Does insurance policy cover all margin risks H
such as theft, robbery, embezzlement,
misappropriation, fire etc.?
218. Is the cash holding capacity of the branch H
within the prescribed limit of insurance policy?
219. Has the branch ensure diversion of surplus H
balance over and above the holding capacity of
SBP Chest?
220. Are Branches maintaining minimum cash
(cash in excess of need transferred to Main
Branch)?
P - ARTICLES IN SAFE DEPOSIT

Audit Objectives
1. To ensure that safe deposit register is properly maintained, updated and checked by the
authorized official.
2. To ensure that the concerned official of the branch is strictly following the procedures
regarding handling of applications, deposit of articles in safe and its delivery to the
constituents/ depositors.
3. To ensure that branch is complying with half yearly physical verification of articles.
4. To ensure that safe deposit charges are regularly recovered from depositors as per
bank’s tariff.
Key Risks
1. Authorized official may deliver the articles without obtaining the deposit receipt or
duplicate receipt or indemnity.
2. Measures for recovery of safe deposit charges from defaulting customers may not be
adequate.
Audit Checklist


Observations

221. Is all safe deposit applications obtained M

on the prescribed application form and
processed / approved as per procedure?
222. Are securities and articles delivered to H
the constituents / depositors on the
production of the acknowledgement deposit
receipt F-163 & F176 respectively?
223. In case constituent has lost the receipt, H
does the authorized official obtain a stamped
indemnity on Form F-165 / duplicate receipt
at the time of the delivery of the articles?
224. In case delivery is made to the authority H
holder, does the authorized official obtain the
confirmation of the same from the depositor
and is such confirmation kept on record?
225. Is the instruction/direction, in respect of M
mode of delivery, obtained from the joint safe
deposit holders on the prescribed form F-
177?
226. Does the concerned authorized official M
also record the mode of delivery on the
receipts and Safe Deposit Register?
227. Is all the record of cancelled safe M
deposits properly maintained and verified
from the cancelled safe deposit receipts /
acknowledgements?
228. Does the manager sign the packet of M
duplicate keys deposited by other branch?
229. Are the remarks “Deliverable on the Joint M
Signatures of the Manager and Head
Cashier” written or printed on the packet?
230. Does both the Branch Manager and M
Head Cashier discharge the cancelled / paid
safe deposit receipts F-176 pertaining to the
duplicate keys under bank’s official stamp at
the time of delivery?
231. Does the authorized official verify the M
safe deposit articles on half-yearly basis?
232. Are safe deposit charges regularly H
recovered as per bank’s tariff?
233. Is number of seals affixed on the packet M
and mode of withdrawals disclosed on the
packet?
Q - SAFE CUSTODY OF SHARES AND SECURITIES

Audit Objectives
1. To ensure the relevant registers, ledgers and documents (specified in the documentation
checklist) are properly maintained, updated, consistent with supporting documents, and duly
checked by concerned officials.
2. To observe the procedure of receipt and delivery of shares and securities from / to the
constituents to confirm whether they are in conformity with bank’s procedure.
Key Risks
1. Shares and securities pledged against advances are saved-in with other securities.

Audit Checklist

No H/M/L Auditor/Audit
or Observations
NA
234. Are the balances of safe custody security M
register (B-63) in agreement with the balances
appearing in safe custody security ledger (B-
62)?
235. Are deposits receipts on F-163 issued and M
their serial number entered in the relevant
account and column in the safe custody
ledger?
236. Are deposit and with-drawl entries properly M
recorded in safe custody and security ledger
(B-62)?
237. In case of constituents instructions H
regarding the collection of profit on securities
have been noted; check the following:
a) Are due dates of collection of interest/
profit on securities entered in the
diary?
b) Has interest or profit on securities been
Collected on due dates?
c) Has such interest been credited to
constituent’s account?
d) In case of realization of credit, have
securities been recorded in the Profit
Register (B-64)?
e) Are all entries in Profit Register
checked and initialed by the authorized
officer?


Observations
Safe Custody Charges
238. Is safe custody fee charged as per H
tariff?
239. Are securities delivered to the H
constituent on the production of deposit
receipt (F-163)?
240. In case of non –production of the H
above receipt on the part of constituent,
is a stamped indemnity on F-165 taken?
241. Have acknowledgement receipts for H
the delivery of securities been obtained
on prescribed Form –160 from the
constituents and kept in file?
242. In case of joint account holder, are M
instructions regarding the delivery noted
on prescribed Form?
Shares and Securities against Advances
243. Are the shares and securities H
against advances kept separately in the
safe deposit?
244. Are such shares and securities M
properly recorded in the safe custody
and security register?
R - POSTATAGE & STAMPS

Audit Objectives
1. To ensure that the documents (specified in the documentation checklist) are properly
maintained, updated and checked by the authorized official.
2. To ensure that the amount drawn and advance for postage are properly accounted for in
the books.
Key Risks
1. Authorized official may not be transferring the unexpended postage advance to the
charges account in time.
Audit Checklist

Observations
245. Postage Book & Registered Letters
Dispatched Register
246. Are the entries in the postage book in M
respect of amount drawn for postage
made under the full signature of the
branch manager?
247. Are the entries in the postage book in M
respect of postage advance verified with
the relevant vouchers and entries in
Charges Account “Postage & Stamps”?

248. Are mail dispatched under registered M

post/through courier services entered in
Registered Letters Dispatched Register?
249. Are postal receipts numbers duly M
recorded with cost of postage in the
relevant column of the Registered Letters
Dispatched Register?
250. Are the registers / books properly M
maintained, updated, duly checked and
initialed by the authorized official?
251. Are the postage balance / stamps M
physically checked by authorized official
on weekly and monthly basis?
252. Is unexpended postage advance H
transferred to charges account “Postage”
at the end of each month?
253. Is the Franklin machine operative and M
being used for the given purpose?
S - SECURITY DOCUMENTS -CHEQUE BOOKS, POs, DDs,

Audit Objectives
1. To ensure that the documents (specified in the document checklist) are maintained,
updated, and checked by the authorized official.
2. To ensure the approvals and confirmations have been obtained from the competent
authority and kept on record.
Key Risks
1. Non-observance of bank’s procedure in respect of daily balancing of security forms in hand.
2. Non-observance of bank’s standard procedure in respect of joint custody of security forms.
Audit Checklist
Observations
254. Has each and every book been H
checked and initialed by authorized
officer of the branch once these receive
from the head office?
255. Are the entries in respect of receipt of M
security forms and blank cheque books
verified from the debit vouchers and
requisition card/requisition slip?
256. Are entries in respect of withdrawal M
of security forms and blank cheque
books verified from the credit vouchers?
257. Are the registers properly M
maintained, updated, checked and
initialed by the authorized official?
258. Compliance with bank’s procedure in
respect of daily balancing of leaves of
security forms in hand.
259. Check the abstract, maintained in a H
portion of stamped and unstamped forms
register or any other subsidiary register
to facilitate the balancing, of the audit

date to verify the correctness of the

same.
260. Has prior approval / subsequent M
confirmation in respect of supply of
security documents to other branches
been obtained from the competent
authority and kept on record?
S. Tokens/ Que Management System

Audit Objectives
1. To ensure that the Token Register is properly maintained, updated, and checked by the
authorized official.
2. To ensure that the concerned officials strictly follow the procedures in respect of
issuance of tokens, daily checking of the tokens and their placement in the strong room
in a locked box.
3. To ensure that the concerned official promptly report the missing tokens to the
supervising official and the supervising official institute the enquiry for the recovery of the
missing tokens.
Key Risks
1. Paying cashier may not be aware of missing tokens.

2. Concerned official may not be promptly reporting the missing/ lost tokens to the
supervising official / competent authority, which may delay to institute the enquiries for
the recovery of lost tokens.
Audit Check List

NA Observations
261. Has the supervising official instituted the H
enquiry for the recovery of the missing
token?
262. In case on non-recovery, does the H
concerned official prepare the list of missing
tokens and notify the same to the
competent authority?
263. Does the concerned staff prepare the H
lists of existing and missing tokens?
264. Does the paying cashier keep the list of H
missing tokens with him for the purpose of
avoiding fraudulent payment against the
cheque bearing the missing token number?
265. Does the supervising official M
authenticate the opening entries of the
register?
266. Are the tokens in use entered in the M
respective columns of the token register?
267. Is the token register properly M
maintained, updated and checked by the
Que Management System

268. Is QMS availability & & functional?

269. Is QMS System with all its displays in
working order and is used daily?
U - BRANCH DOCUMENTS/CONTROL DOCUMENTS/BANK’S INSTRUCTIONS

Audit Objectives
1. To ensure that the control documents are available at Branch and in the custody of
authorized official, obsolete branch documents are removed from the live documents
and documents are updated.
2. To ensure that two sets of test keys are not kept with one officer.
Key Risks
1. Controlled documents may not be in the custody of authorized official, which may lead to
the loss of documents.
2. Two sets of test keys remain with one officer, which leads to loose control over the
security of the test keys.

Observations
Custody of Controlled Documents
270. Are the following control documents H
in the custody of the custodian and are
these updated?
271. NBP Code Book/SBP Code
Book/NBP Check Signal/ Test Keys Parts
I & II/Correspondents lists and agency
arrangements are available.
NA Observations
272. Check availability of Specimen
signatures booklets of officers &
executives/Test Key of foreign
Correspondents Banks/Standard Procedure
Checklist/Opening Branch License/Licenses
for commencement of FEX Business, if
applicable/License of opening of
Booths/Head Cashier Agreement for
holding cash, valuables etc/Cash Staff
Security /Deposit Account Pass
Books/Fidelity Guarantee Insurance
Policies of Staff/Letter of Locumtenance (F-
18)/Zakat Exemption Declarations/Copy of
Bank Byelaws/Copy of Bank
Ordinance/Treasury Rules of Federal
Government (Volume I & II)/Head office
circulars/Indemnity Bonds in respect of
disbursement of balances of deceased
accounts and issuance of duplicate DDs,
etc./Safe Deposit Receipt of branch
duplicate Keys/Advance Deposit Receipt of
cash security electricity/telephone/Lease
Agreements
273. Has present custodian of branch H

initialed the branch documents register at

the time of taking over the charge?
274. Have obsolete branch documents been M
removed from the current documents after
marking disposal against each entry in the
register and kept separate from the live
documents?
275. Has branch manager authorized the 2nd H

custodian in writing as joint custodian of
telegraphic test key?
276. Has acknowledgement in respect of H
table IV been obtained from the 2nd joint
custodian?
277. Have names of both the custodian of H
check signals been advised to regional
office as per bank’s instructions?
278. Do the two sets of test keys not remain H
with one officer?
279. Is Test Key Charge Register being H
maintained? Is 1st set of Test Key retained
with the Manager or Operations Manager
(not below the rank of OG-1)?
V - CASH SUPPLIED TO & RECEIVED FROM BRANCHES

Audit Objectives
1. To ensure that cash supplied to and received from other branches/SBP is properly
accounted for in the Cash Remittance Register/ Cash Payment & Receipt Registers.
2. To ensure that the weekly Cash Received / Paid Statement is correctly prepared, timely
sent, and reconciled at feeding branch/ Regional office.
3. To ensure that the procedures for cash remittance, as laid down in the agreement with
the private security agency, are duly complied with.
Key Risks
1. Cash supplied to and received from branches may have not been accounted for on the
same day of its remittance.
2. Joint custodian/ Head Cashier may not be checking the consignment (cash) before
delivering to and receiving from the private security agency.
3. Cash received /paid statement may have not been correctly prepared and reconciled.
4. Insurance policy may not be valid at the time of the audit.
5. Authorized officer may not be verifying the signatures of indenting branch manager on
the cash indents before remitting the cash.
Audit Checklist
Observations
280. Are signatures of cash indenting H
branch manager and head cashier along
with check signal appended on the cash
indents?
281. Have the concerned official verified H
cash indents before remitting the cash?
282. Does the authorized official obtain the M
signatures of the person delivering indent
on the back of stubs?

283. Are the cash remittance received / H

drawn from other branches and / or SBP
properly accounted for in the books on the
same day from the cash remittance
invoices?
284. Does the branch obtain the M
acknowledgement of cash deposit from the
other branches?
285. Are cash remittance invoices on Form M
F-369 prepared in quad ruplicate?
286. Are signatures of the receiving branch H
official on such invoices verified when
these were received back?
287. Are weekly Cash Received / Paid M
Statement correctly prepared by the
concerned official?
288. Is the statement timely sent and M
reconciled at feeding branch and regional
office?
289. Are proceeds of local collection of M
cheques recorded in the Cash Remittance
Register?
290. Is copy of agreement with private L
security agency available with branch?
291. Are signatures of the representative of H
security agency obtained on the register?
292. Do Joint Custodian/ Head Cashier sign H
shipment delivery receipt to confirm that
consignment received from the private
security agency is in perfect condition and
duly sealed?
293. Are dates of acknowledgements M
marked off in the relative column of the
cash remittance register?
294. Are amount and date of insurance L
premium paid recorded in the relative
column of the cash remittance register?
295. Is the register properly maintained, M
updated, checked and initialed by the
W - BRANCH UTILITY BILLS COLLECTION OVER THE COUNTER

Observations
Utility Bills Collection over the Counter
296. Whether branch has opened single H
collection account for collection of bills
through UBPS-OTC?
297. Whether authorized User ID and H
password issued by IT Center is
available in branch?

298. Branch has required expertise to use H

the system?
299. Whether there is any manual bill H
receipt entertained after implementation
of UBPS?
300. Whether stubs(lower portion) of bills H
are available in branch?
301. Whether there any bill reflected in H
SAF?
302. Whether Cash and Transfer are H
made by single teller?
303. Any other discrepancy as per Inst H
Circular No-150/2015 dated 19.11.2015
Checklist on Cash & Management- under Core Banking Application (CBA)
Revised Checklist on Cash & Securities Department has been developed considering the
changes in process after implementation of CBA, the undermentioned checklist pertains to only
Cash Management System under Core Banking Application (CBA).
Observations Risk Level Auditors Remarks

304. Whether the Branch defined its cash limits of
Vault/Strong Room & Counter in CBA according to High
the insurance coverage?
305. Whether Head cashier Transferred Cash from
SBP’s Vault to NBP branch Vault using a special
Transaction code developed for this purpose in High
Profile (ZSBPCR) and is transferred to branch
vault using transaction code ‘VCI’ (If applicable)?
306. Whether the Head cashier entered the cash
received from NBP, Chest Branch using a special
Transaction code developed for this purpose in High
Profile (ZNBPCR) and is transferred to branch
vault using transaction code ‘VCI’?
307. Whether in case cash holding in vault
increased from the assigned limit the Head cashier
has transferred the exceeding holding to SBP/NBP
chest using the transaction code defined for it
High
(VCO & ZSBPDR/ZNBPDR) and is transferred
from branch vault using transaction code ‘VCO’ or
the branch has requested for arrangement of
overnight insurance from FCD?
308. Whether at the start of day/during the day
Head Cashier distributes cash to all tellers in the
branch by transferring out cash from branch vault
High
using transaction code ‘VCO’ and handing over to
teller using transaction code ‘TO’. Corresponding
activity for the completion of transfer?
309. Whether teller receives the cash and Transfer
in the cash to its counter by using transaction code High
“CI” and “TI”?
310. Whether at the start of day/during the day High
Head Cashier transfer Prize Bond using


transaction code ‘VPZBO’ and handing over to
teller using transaction code ‘TO’. Corresponding
activity for the completion of transfer?
311. Whether teller receives the Prize Bond and
Transfer in the same to its counter by using High
transaction code “PZBI” and “TI”?
312. Whether at the start of day/during the day
Head Cashier distributes Foreign Currencies to all
tellers in the branch by transferring out cash from
branch vault using transaction code ‘VFEXO’ and
handing over to teller using transaction code ‘TO’.
Corresponding activity for the completion of
transfer?
High
EX in transaction code will be replaced with codes of
foreign currencies:
 VFUSO –USD
 VFEUO–Euros
 VFJPO–Japanese Yen
 VFGBO– Great Britain Pounds
 VOFCO–Other Currencies
313. Whether teller receives the Foreign Currency
and Transfer in the same to its counter by using
transaction code “FEXI” and “TI”?
foreign currencies:
High
 VFUSI –USD
 VFEUI–Euros
 VFJPI–Japanese Yen
 VFGBI– Great Britain Pounds
 VOFCI–Other Currencies
314. Whether Head Cashier transfers cash for ATM
to respective teller using transaction codes “VCO” High
and “ATMCI”?
315. Whether the entries for Cash Replenishment in
ATM are being made other than specified
High
Transaction Codes such as MDR or MCR with
ATM GL?
316. Whether before handing-over the cash to
Head Cashier at the End of Day teller verified all
High
the report with vouchers to confirm that counter is
balanced?
317. Whether at the End of Day teller hand-over
the cash to Head Cashier using transaction code High
“CO” and “TO”?
318. Whether at the End of Day Head Cashier
transfers the cash to vault using transaction codes High
“VCI” and “TI”?
319. Whether at the End of Day teller hand-over the
Prize Bond to Head Cashier using transaction High
code “PZBO” and “TO”?
transfers the Prize Bonds to vault using High
transaction codes “PZBI” and “TI”?


321. Whether at the End of Day teller handed-over
the Foreign Currency to Head Cashier using
transaction code “FEXO” and “TO”?
foreign currencies:
High
 VFUSO –USD
 VFEUO–Euros
 VFJPO–Japanese Yen
 VFGBO– Great Britain Pounds
 VOFCO–Other Currencies
transfers the Foreign Currency to vault using
transaction codes “FEXI” and “TI”?
foreign currencies:
High
 VFUSI –USD
 VFEUI–Euros
 VFJPI–Japanese Yen
 VFGBI– Great Britain Pounds
 VOFCI–Other Currencies
323. Whether the following reports are being
generated/signed-off or not on daily basis?
a) Teller Journal
b) Teller Totals
c) Cash Over/Short
d) Teller Cash
e) Branch Cash
f) Cash count by denomination for balancing
High
g) Teller Proof Report is successfully showed
and cash in balance
h) Branch Proof Report is successfully showed
and cash in balance
i) Cash Transaction by Denomination (Total)
j) Currency Chest Slip
k) Cash Balance Book (B-52)
l) Cash Monitoring
m) Cash Vault Register (B-50)
324. Whether Head Cashier on daily basis checks
conformity between B-52 Register and CBA Cash
High
Balance Book on daily basis? Further, auditor
should check the same as on date of audit.
325. Whether entries in G.L Def: 1103200002 /
Teller Over GL Code: 2050900002 / Teller Short
High
GL Code: 1103200004 are being monitored /
settled on daily basis?
326. Whether any difference found in non-
High
reconciliation of above (03) GL Heads?
Audit Period: ____________ Branch / Auditable Entity Name: ________________

Prepared By: _____________________________________ Date: ______________
(Name and Title)

Reviewed / Supervised By: __________________________ Date: ______________

(Name and Title)
Note: The above said Checklist properly filled in and supported with the relevant documentary
evidences, where deemed necessary, should be retained as audit working paper for future
ready references.


Cash and Securities Department

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National Bank of Pakistan Branch Audit Checklist

Cash and Securities Department Doc. No. 2 November-2018 Page 1 of 38

CASH AND SECURITIES DEPARTMENT

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

A - CASH IN HAND – LOCAL CURRENCY

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of shortage and recovery thereof?

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Controlled Copy, DO NOT Duplicate For Internal Purpose Only

24. Check the designated chest branch is H

B - FOREIGN CURRENCY NOTES

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Controlled Copy, DO NOT Duplicate For Internal Purpose Only

C - AUTOMATED TELLER MACHINE (ATM)

Audit Procedures Yes / No Risk Remarks of

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

violation of para a (3) PSD master circular no.

D - NATIONAL PRIZE BONDS

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

May 17, 2011)?

F - BLANK FORMS OF DSCs, NIT UNITS, FEBCs, DBCs, FCBCs, PIBs

1. Branch may not be in compliance with Government/SBP instruction.

Yes / No Risk Remarks of

G - STAMPED AND UNSTAMPED FORMS – STAMP ACCOUNT

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

Yes / No Risk Remarks of

H. PAK RUPEES TRAVELERS CHEQUES

Yes / Risk Remarks of

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b) Debit Vouchers (F-50)

75. Are proceeds of PRTCs encashed by M

a) Amount of sale proceeds

b) Signatures of two authorized officials

c) Check Signal and verification thereof

82. Are the details of sale of PRTCs by other M

Controlled Copy, DO NOT Duplicate For Internal Purpose Only

following before weekly reimbursement of

88. Whether unclaimed PRTCs remained H

I. FOREIGN CURRENCY TRAVELERS CHEQUES

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the audit of this section and compare these with

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3. Bank’s charges may not be recovered as per the latest tariff.

Audit Procedures Yes / No Risk Remarks of

J. CASH AND SECURITY STATIONERY

Audit Procedures Yes / No Risk Remarks of

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b) Foreign Currency Notes

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is caught during on-site examination &

Audit Procedures Yes / No Risk Remarks of

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branches match with the approved

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146. Staff and Branch Management are

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Manager/Operations Manager at least

K - STRONG ROOM AND SECURITY ARRANGEMENTS

Audit Procedures Yes / No Risk Remarks of

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L - PHYSICAL VERIFICATION OF KEYS

Audit Period: Branch / Auditable Entity Name: ____

Reviewed / Supervised By: ____________ Date: