DRAFT

1. GENERAL BANKING:

3.1 CUSTODY AND VERIFICATION OF VALUABLES:

3.1.1 Cash and Cash Equivalents:
Cash and cash equivalents of Ring Road Branch were held under the joint custody of Mr. A. K. M. Iquebal,
FVP & HOB, Ms. Rubaida Iftakhar, EO and Mr. Md. Sharif Hasanul Hoque, JO & Cash in-charge of the
branch. The closing balances of cash and cash equivalents as on 21.01.2019 were checked on the
following working day morning i.e. on 22.01.2019 and following were observed:
Item Amount (Tk.) Observations
Checked with Cash Balance Book (LCY), Vault Register and
Cash balance (LCY) 16,310,095.00
Trial Balance dated 21.01.2019 and found in order.
Checked with Prize Bond register and Trial Balance dated
Prize bond 11,900.00
21.01.2019 and found in order.
Checked with Stamp in hand register and Trial Balance dated
Stamp in hand 43,880.00
21.01.2019 and found in order.
3 .3 .3 Insurance on Cash in Safe, Cash on Counter:
Figure in Million Tk.
Sl Particulars Insurance Policy No Amount Validity
1 Cash in safe/Vault 25.00
RIL/KBZ/BMI/P-
2 Cash on Counter 2.00
0076/01/2018 01.01.19
4 ATM Booth 5.00
5 Furniture & Fixture, Electrical & Office App. RIL/KBZ/FP-000297/01/2018 8.50
a) Validity of insurance coverage expired on 01.10.2019 but renewal copy of insurance not obtained till to
audit date.
b) Supporting documents of temporary insurance like insurance policy/cover note/payment of temporary
insurance not found in the branch which is non compliance of Operation manual, para 1.18 (f), p- 13.
Branch must ensure compliance of the similar nature of lapses on the other days, if any, and mention
accordingly in the compliance report.

c) Cash on counter:
3. Cash on counter limit (Limit Tk. 2.00 Million) exceeded in some cases which does not comply with
insurance policy. e.g.
Figure in Million Tk.
Sl. Date Counter Limit Amount in counter Excess in counter Audit Remarks
1 23.05.2018 6.61 4.61 The branch is
2 07.08.2018 7.66 5.66 advised to keep the
3 27.05.2018 2.00 Mln. 7.71 5.71 cash in counter
4 10.10.2018 8.12 6.12 within limit.
5 27.11.2018 8.10 6.10

33. The branch made entries in the Vault register once in a day though they deposit and withdraw cash
to / from the vault several times as per daily requirement.
Branch must ensure compliance of the similar nature of lapses on the other days, if any, and mention
accordingly in the compliance report.
They (Branch) are also advised to maintain cash in safe, cash on counter & ATM booth load limit within
the insured limit meticulously and follow instruction circular No: Instr./2014/BOD-015/028 dt. 23.03.2014.
3.3.3 Fake Note:
Branch management informed the audit team that they did not received any fake note over the counter
during audit period (i.e. from 23.05.2018 to 21.01.2019).
i. As per Bangladesh Bank Circular No. -ডডিডসিএম (জজালননজাট)০৯/২০১৬-৪৭৫, তজাডরিখ: ২৫-০১-২০১৬; video display of
security features of Bank’s original notes was not found with the branch.
Branch is advised to examine the defective and mutilated/torn notes carefully before paying the exchange
value there-against in order to comply the circular No: Ref/BA/CO/BOD-411/2018 dated 17.04.2018 in this
regard. They should also ensure that the notes are not counterfeit/built-up.

3.1.4 Prize Bond related observations:

i) No authorized officer’s signature of checking draw result was found on Prize bond register/draw result
sheet.
ii) Cutting/overwriting was observed in Prize bond register.
Branch should record the distinctive numbers of the Prize Bonds held by them at least 07 (seven) days
before of each draw, check the draw result sheets with the said stock and record the outcome thereof in
the register under the signature of Cash In-charge and other authorized official preferably by GB In-
charge or Manager Operation/HOB.

3. 1. 5 Stamp In Hand:
The closing balance of stamp in hand as on 21.01.2019 amounting to Tk. 43,880.00 was checked on the
following day morning i.e. on 22.01.2019 and found agreed with the Trial Balance

Branch should check the stock and record the outcome thereof in the register under the signature of Cash
In-charge and another authorized official preferably by GB In-charge or Manager Operation/HOB.

3.1.6 Utility Bill receiving process related observation:

Control system should be established while receiving utility bill. So that unposted utility bill can be
identified during transaction hour.

3.1.7 Lapses/ Irregularities observed in ATM operations:

ATM cash balance was checked on 31.01.2019 and found Tk. 76,000.00 which was agreed with the
journal print of ATM. Following lapses were observed:
a) Mr. Md. Sharif Hasanul Hoque availed leave on 04 November 2018, but no entry on ATM physical key
register was observed.
b) Authorized signature was not found in Key & combination password register.
The branch is advised to follow the above mentioned circular meticulously. Bangladesh Bank PSD Circular
No: 01/2016 dated 14.02.2016 regarding necessary training of the guards of ATM booths on measures to
repel fraud.

3.1.8 Key Register & Custody of Key related observations:

As per record, duplicate keys of cash vault door, grill door, iron safe and locker of the branch is lodged
with Shyamoli Branch, Bank Asia Ltd., Dhaka, which were last exchanged on 29.08.2018 vide ref. No.
BA/Ring Road/GB/2018/317. Branch is advised to update the Office Order regarding vault key
management according to the respective circular and record all movement of keys in the prescribed key
register mentioning date, time, residential address & telephone no. of person’s handing over and taking
over the keys and follow the BOD Circular No: Instr./2014/ BOD-004/006 dated 08.01.2014 meticulously.

3.2 Observation under the different transaction process:

Usually a transaction process is taken place under following categories. Branch has to ensure the
processes are followed with due diligence and without negligence.
 3.2.1 Observation under Cash Transactions process:

3. It was observed that in case of cash payment, teller makes posting of cheque in istelar and make
payment with single cancellation instead of joint cancellation in all cases. Similarly while receiving
cash, teller receives cash and make input in istelar system & return customer copy of deposit slip to
the depositor with single signature instead of dual signature i. e. real time checking of cheque
payment and deposit slip not ensured by the checker/Cash-In-charge/MOB. Consequently, the issue of
wrong posting or non-posting cannot be ascertained at the time of transaction which does not comply
with circular No. instr./2017/BOD-037/068 dated 20.06.2017.
33. It was appeared that cash related transactions were authorized at a time at the end of the day
without verifying supporting documents in all cases which does not comply with instruction circular
No. Instr./2017/BOD/037/068 dated 20.06.2017. For which fraud forgery may be occurred which may
hamper the interest of customers as well as Bank.
333. Tellers often leave the cash in a scattered condition and insecurely instead of keeping the same in an
organized way and under lock and key during their temporary movement.
iv. Tellers and customer service officers leave cash counter or customer service desk without log out on i-
Stelar system during their temporary movement.
3. Branch did not check cash cheque through UV Machine to ensure its genuineness in most of the cases
which does not comply with instruction circular No: Instr./2013/BOD-21/042 dated 15.06.2014. In
addition, counter wise UV machine was not found in the branch.
33. It was observed that the branch did not use the MICR cheque reader machine in some cases to make
payment of cash over the counter.
333. Foreign remittance paid on the basis of NID’s but genuineness of the NIDs was not verified by the
branch. It is also mentionable that documents for the verification of mobile number mentioned in the
money receipt were not found in the voucher.
iv. Some bundles of currency notes were found in disarray. e.g. mixture of fresh and reissue notes,
mixture of size and shape, mixture of front face and back face etc. which does not comply with
circular no. Instr./2013/BOD-035/088 dated 14.11.2013.
v. Dual display machine was found in cash counters which does not comply with Bangladesh Bank
Circular No: cwicÎ-Rvj †bvUt 01 (cwjwm)/2007/191, ZvwiLt 04/07/2007 I cwicÎ-Rvj †bvUt 01
(cwjwm)/2007/309, ZvwiLt 18/11/2007.
vi. Mutilated and torn notes exchanging register was not maintained by the branch, which does not
comply with Bangladesh Bank, DCM circular letter no. cwicÎ bs Bwnkv: 23 (cwjwm)/2013-15,
ZvwiL: 14/01/2013.
vii. Unauthorized person’s entry register in teller area was not maintained by the branch.
viii. Branch does not maintain any register for exchanging customer’s mutilated notes.
ix. While checking the cash and cash equivalents on the first day morning of the audit, i.e. on
22.01.2019, a large number of mutilated and torn notes were kept in the vault with regular notes.
Details as follows:
Sl. Denomination Quantity Amount Remarks
1. 1000 24 24,000.00The branch is advised to
2. 500 187 93,500.00 immediately contact with the
3. 100 1400 140,000.00 feeding Branch to exchange
4. 20 200 4,000.00 mutilated & torn notes.
5. 10 1700 17,000.00
6. 5 200 1,000.00
7. 2 300 600.00
Total= 280,100.00

3.2.2 Observation under Clearing Transactions:

While making clearing transaction, all the related circulars e.g. BA/CO/PSD/2017/141 dated 16.08.17;
Instr/2018/12 dated 18.01.2018; BA/CO/Inst/2012/CCD/62 dated 20.11.2012; BA/CO/CCD/04/2011 dated
24.03.2011; Instr/2016/BOD-015/035 dated 26.04.16; BB’s Circular PSD/BACH/42/2014/499 dated
 14.08.14; PSD Circular No.-04/2013 dated 26.11.13 and procedure to be followed meticulously. For
example every cheque must be placed under UV machine, MICR reader machine in order to verify the
genuineness of the instrument etc. In addition, checker must ensure beneficiary’s account and others
issues as per requirements.

Observations:
i) In some cases, branch official manually input cheque particulars in BACH clearing instead of e-MICR
machine to scan the clearing cheque.
ii) In some cases branch did not endorse “UV Checked” at the rear side of the Clearing cheque which is
noncompliance of circular no. BA/CO/PSD/2017/141 dated August 16, 2017.
iii) Cheque referred & return register not duly maintained.
iv) Branch did not introduce any register for receiving outward clearing Cheques. Both clearing
transaction and receiving of clearing Cheques are assigned to same/single officer.
v) Positive pay instruction not recorded in Inward mail register in all cases.
vi) Customer signature not verified by branch officials on positive pay instruction in all cases. Some
instances are given below:
Sl. Date A/C No A/C Name Chq. No. Cheque Amount(Tk)
08.01.2019 08636000037 Uddipan Smap 2419299 80,000.00

10.12.2018 08636000002 Padakhep Manabik CD AA 1486296 2,280,000.00

Unnayan Kendra
14.11.2018 08633000112 R.B Enterprise 6348280 300,000.00

vii) 40 Number of Clearing cheque returned unpaid and found under the custody of branch official since
long.
SL Cheque Bank Name AC No. Cheque Amount Last Date Return
Date No. in Tk of Date
Placement
Date
1. 24.01.19 Bangladesh 0000000001101 Ga-1910705 235499 30.01.19 30.01.19
Bank
2. 24.01.19 Bangladesh 0000000001103 Ga-1919204 92152 30.01.19 30.01.19
Bank
3. 30.01.19 Dhaka Bank 2271000003238 1032956 60000 30.01.19 30.01.19

4. 24.01.19 Basic Bank 0210010005481 CAB- 220000 30.01.19 30.01.19

0855521
5. 15.11.18 Basic Bank 5316010000182 CAB- 377000 28.01.19 28.01.19
0470314
6. 23.01.19 City Bank 2701088528001 3725279 1000 27.01.19 27.01.19
7. 23.01.19 City Bank 2701088528001 3725280 1000 27.01.19 27.01.19

8. 23.01.19 City Bank 2701088528001 3725281 1000 27.01.19 27.01.19

9. 23.01.19 City Bank 2701088528001 3725282 1000 27.01.19 27.01.19

10. 23.01.19 City Bank 2701088528001 3725283 1000 27.01.19 27.01.19

11. 23.01.19 City Bank 2701088528001 3725284 1000 27.01.19 27.01.19

12. 10.01.19 Brac Bank 1511200914495001 CPA9427014 5000000 22.01.19 22.01.19

13. 02.01.19 Southeast 0013100001137 CD-4009784 2000 22.01.19 22.01.19
Bank
14. 30.07.18 Brac Bank 1532202144069001 CAP2775303 550000 21.01.19 21.01.19
15. 20.01.19 Pubali Bank 4648101005579 B25-N-A 100000 21.01.19 21.01.19
0064726
16. 09.01.19 Union Bank 0041010000703 AWCA 200000 16.01.19 16.01.19
 SL Cheque Bank Name AC No. Cheque Amount Last Date Return
Date No. in Tk of Date
Placement
Date
0451556
17. 22.12.18 Shahjalal 403011100000846 0000015 310000 23.12.18 23.12.18
Islami Bank
18. 18.12.18 DBBL 148.151.250157 4512557 60000 19.12.18 19.12.18
19. 29.11.18 Brac Bank 1547103531984001 STB4689962 550000 03.12.18 03.12.18
20. 14.11.18 Standard 18-1339535-01 9102451 230000 15.11.18 15.11.18
Chartered
Bank
21. 31.10.18 Southeast 0011100047724 9638631 36900 31.10.18 31.10.18
Bank
22. 12.09.18 IFIC Bank 1007667478001 CAL 2000 20.09.18 25.09.18
0710741
23. 19.09.18 City Bank 1142402919001 2897000 120000 20.09.18 20.09.18
24. 26.08.18 Rubali Bank 0398020000638 CDB1430665 5495 30.08.18 30.08.18
25. 07.08.18 City Bank 1101784156001 2987883 20000 20.08.18 20.08.18
26. 09.08.18 AB Bank 4021-593758-314 4977681 200000 16.08.18 16.08.18
27. 12.08.18 DBBL 258.110.2898 3672193 433000 13.08.18 13.08.18
28. 01.08.18 National 1154001008717 8370477 100000 05.08.18 05.08.18
Bank
29. 19.07.18 Brac Bank 1501100010721002 SBS 29000 24.07.18 24.07.18
0879175
30. 18.07.18 City Bank 2401838652001 5323517 540000 19.07.18 19.07.18
31. 12.06.18 AB Bank 4022-787816-324 9602734 1500000 14.06.18 14.06.18
32. 10.06.18 Pubali Bank 3547901020825 6893430 824100 11.06.18 11.06.18
33. 10.06.18 ICB Islamic 0200060034813 1838481 290000 10.06.18 10.06.18
Bank
34. 03.05.18 Prime Bank 16211010013274 6852728 250000 22.05.18 22.05.18
35. 20.05.18 EXIM Bank 08412100027076 4799105 200000 21.05.18 21.05.18
36. 17.05.18 Eastern Bank 0000000080534 0950446 70000 20.05.18 20.05.18
37. 16.05.18 Brac Bank 90041812000920 CCS 32000 17.05.18 17.05.18
2011571
38. 08.04.18 Standard 24-1222972-01 6305658 28600 08.04.18 08.04.18
Chartered
Bank
39. 17.01.18 Agrani Bank 0200002528739 SBB 500000 17.01.18 17.01.18
2802911
40. 18.12.17 FBL 0111100047843 CA 1349116 30000 03.01.18 03.01.18

viii) As per Bangladesh Bank PSD Circular no. 04/2013 on 02.12.2013, branch must collect “mandatory
positive pay instruction” and confirm concern division (PSD) of each bank on or before 2.00 p.m each
day but branch confirmed concern division to honor all cheques without collecting written positive pay
instructions from the client’s. Branch official informed that verbal instruction was taken from the
concernd clients over phone instead of written instruction. e.g.

SL Date Account Name Cheque no. Amount in Tk AC No.

1 The Acme Laboratories 08633000416
2 Fatema Steel Corporation 08633000490
3 Anisur Rahman 08633000750
4 Mazid Sons Construction 08633000006
5 Dream Fasion 08633000741
ix) It is also mentionable that customer signature was not verified by branch official in positive pay
instruction in some cases. e.g.

Sl. Date A/C No A/C Name Chq. No. Cheque Amount(Tk)

14.11.2018 08633000112 R.B Enterprise 6348280 300,000.00

08.01.2019 08636000037 Uddipan Smap 2419299 80,000.00

10.12.2018 08636000002 Padakhep Manabik CD AA 1486296 2,280,000.00

Unnayan Kendra

x) HOB/ MOB marking was not found on positive pay instruction in some cases.
The branch is advised to verify clearing cheque through UV & eMICR machine & collect written “Positive
Pay Instruction” from the client while making payment of clearing cheques. The branch is also advised to
follow due diligence in clearing trasactions & authorize transactions by ensuring/ reviewing proper
instrument & voucher.

e.

3.2.3 Observation under the process of Bills & Remittance Transactions:

A. Outward/inward Bill for Collection (OBC/IBC):
i. Branch did not pass contingent liability voucher from the very beginning. Consequently, it could not be
ascertained if there any amount remains under collection.
ii. Date of realization and initial column found blank in some cases in OBC/IBC register. e.g. 261/18,
251/18, 252/18, 259/18, 263/18, 03/19.
iii. OBC charge not realized. e.g. 198/18, Dated 02.10.2018, 261/18 Dated 24.12.2018.
iv. Account number not mentioned in OBC register.
Branch is advised to pass OBC contingent liability voucher & maintain the register properly.

3.3 Security Stationeries:

While checking physical security stationary, security items and register, following observations were found:

A. ATM Related observations:

i) As on 28.05.2018, total 77 number of ATM cards & 64 number of PINs found in
the branch custody. These are as follows:
Particulars ATM Card ATM PIN Remarks
Within 90 days 59 59 Branch should deliver the ATM Card & PIN Code
Above 90 days 26 60 immediately and follow circular no.Instr./2013/
Total 85 119 BOD-13/054 dated 09.06.2013.

B. Cheque Book Related observations:

i) As on 31.01.2019, total 166 Number of cheque books found undelivered which are
as follows:
Particulars CD SB Total Remarks
Within 90 days 49 47 96 Branch is advised to deliver the above 90 days cheque books
Above 90 days 33 37 70 immediately and follow circular no. Instr./2013/BOD-13/054
Total 82 84 166 dated 09.06.2013 in this regard.
 ii) Delivery date was not mentioned in cheque book issue register in some cases. Sl. No. 2258, CD-382,
Sl. No. 2233, CD-193, Sl. No. 1219, CD-21, Sl. No. 2507, CD-49.
iii) Cheque book delivered to the account holder without obtaining authorization letter
in few cases. e.g.
Sl AC No Delivery date Starting No. Ending No.
1 CD 290 05.07.2018 4222426 4222450
iv) Cheque book issued to the account holder without obtaining branch official’s
signature. e.g.
Sl AC No Delivery date Starting No. Ending No.
1 CD 696 Not Mentioned 4970416 4970465
2 CD 193 Not Mentioned 4392426 4392525
3 CD 513 13.01.2019 8117641 8117665
v) Cheque book delivered to the customer but Customer’s signature
not verified by branch official. e.g
Sl AC No Delivery date Starting No. Ending No.
1 CD 696 Not Mentioned 4970416 4970465
2 CD 193 Not Mentioned 4392426 4392525
3 CD 21 Not Mentioned 4152346 4152445
CD 513 13.01.2019 8069966 8070065

vi) Cheque book delivered to the customer but company seal not affixed on cheque
book issue register in some cases. e.g. Sl. No. 2255, CD-694, Sl. No. 2235, CD-257, Sl. No. 2495, CD-
555.
vii) 69 number of Cheque books delivered to customer or destroyed but still
found as prepared condition in the system. i.e.
Sl Status Date A/C No Chq. Serial Starting No. Ending No.
1 9/30/2018 08633000008 AB 6498851 6498950
2 9/10/2018 08633000065 AB 6146186 6146210
3 12/13/2018 08633000073 AB 7870376 7870475
4 2/28/2018 08633000096 AB 3119741 3119840
5 1/27/2019 08633000152 AB 8594071 8594170
6 12/3/2017 08633000193 AB 1709881 1709980
7 12/3/2017 08633000193 AB 1709981 1710080
8 12/3/2017 08633000193 AB 1710081 1710180
9 11/28/2018 08633000193 AB 7579776 7579825
10 11/28/2018 08633000193 AB 7579826 7579875
11 9/15/2015 08633000209 AA 0662871 0662920
12 10/18/2017 08633000237 AB 0971491 0971540
13 10/8/2018 08633000315 AB 6651276 6651325
14 1/11/2017 08633000358 AA 6757001 6757050
15 7/31/2018 08633000575 AB 5561771 5561820
16 12/14/2017 08633000602 AB 1918901 1919000
17 12/26/2017 08633000605 AB 2078986 2079085
18 1/4/2018 08633000609 AB 2201506 2201530
19 2/14/2018 08633000630 AB 2889616 2889665
20 1/27/2019 08633000652 AB 8594021 8594070
21 4/19/2018 08633000666 AB 4004181 4004230
22 5/3/2018 08633000676 AB 4202061 4202110
23 5/6/2018 08633000679 AB 4232961 4233010
Sl Status Date A/C No Chq. Serial Starting No. Ending No.
24 5/20/2018 08633000682 AB 4491706 4491730
25 6/12/2018 08633000692 AB 4880316 4880365
26 6/20/2018 08633000694 AB 4926856 4926905
27 7/18/2018 08633000703 AB 5370996 5371045
28 7/31/2018 08633000711 AB 5583046 5583095
29 8/8/2018 08633000712 AB 5726496 5726595
30 10/17/2018 08633000733 AB 6835681 6835730
31 10/24/2018 08633000738 AB 6955526 6955575
32 1/1/2019 08633000746 AB 8087911 8087935
33 2/15/2016 08634000115 AA 2591066 2591075
34 5/25/2016 08634000366 AA 3823356 3823380
35 2/6/2018 08634000431 AB 2730051 2730075
36 8/30/2018 08634000631 AB 5974131 5974155
37 1/9/2019 08634000728 AB 8250111 8250135
38 1/9/2019 08634000728 AB 8250136 8250160
39 1/5/2016 08634000839 AA 2025071 2025095
40 3/16/2016 08634000966 AA 3017851 3017860
41 3/28/2016 08634001085 AA 3124456 3124465
42 1/13/2019 08634001382 AB 8307076 8307085
43 1/13/2019 08634001382 AB 8307086 8307095
44 1/13/2019 08634001382 AB 8307096 8307105
45 1/10/2019 08634001677 AB 8280116 8280125
46 12/10/2018 08634001860 AB 7778411 7778435
47 12/14/2017 08634001908 AB 1904321 1904345
48 7/25/2018 08634001983 AB 5476811 5476835
49 3/21/2018 08634001998 AB 3523596 3523620
50 10/23/2018 08634002032 AB 6926061 6926070
51 4/26/2018 08634002116 AB 4137611 4137620
52 5/14/2018 08634002177 AB 4351951 4351960
53 7/8/2018 08634002234 AB 5167996 5168020
54 7/25/2018 08634002235 AB 5456621 5456645
55 9/24/2018 08634002320 AB 6393321 6393330
56 10/3/2018 08634002335 AB 6562911 6562920
57 11/8/2018 08634002368 AB 7212231 7212255
58 11/11/2018 08634002373 AB 7241836 7241845
59 11/8/2018 08634002385 AB 7241801 7241825
60 12/9/2018 08634002415 AB 7749221 7749245
61 1/13/2019 08634002433 AB 8307041 8307050
62 1/16/2019 08634002444 AB 8386671 8386680
63 9/20/2018 08636000076 AB 6348571 6348620
64 8/21/2017 08636000081 AB 0056291 0056340
65 9/24/2018 08636000092 AB 6404941 6404990
66 9/24/2018 08636000092 AB 6404991 6405040
67 1/27/2019 08636000104 AB 8594171 8594220
68 1/27/2019 08636000104 AB 8594221 8594270
 Sl Status Date A/C No Chq. Serial Starting No. Ending No.
69 1/27/2019 08636000104 AB 8594321 8594370

viii) Signature of Account holder in authorization letter was not verified by Branch
official.e.g.
SL A/C No Date of delivery
1 CD 380 01.04.2018

However, after checking, many irregularities/lapses identified from samples are as follows:

Sl. Nature of lapses Example A/C no.

A. Account holder related:
1. Photograph of the account holder not attested by the introducer SB: 2326, 2324, 2317,
CD: 752, 758, 761, 747,
2. NID was not verified from the EC Module SB: 2334, 2324, 2285, 2281,
2265, 2259, 2255,
SND: 101, 748, 763, 758,
743, 720, 739, 703, 761,
B. Introducer related:
1. Introducer signature was not verified by branch official CD: 728,
2. Introducer signature verification officer’s signature not found CD: 736,
3. Introducer’s information found blank CD: 752, 748,
4. Account opened without signature of introducer CD: 720,
C. KYC & TP related:
1. KYC not approved by HOB/BAMLCO in most of the cases which CD: 728, 730,
does not comply with BFIU Circular Letter No 01/2017 dated
16.01.2017. e.g.
2. KYC found blank CD: 752,
3. Account opened in the name of ‘Student/house wife/Mother’ but SB: 2326, 2321, 2309, 2295,
KYC of beneficial owner not obtained 2292, 2287, 2278,
4. TP found blank CD: 752, 763,
1. Source of fund not mentioned CD: 752, SND: 103, 102,
SB: 2286,
2. Form XII not obtained SND: 100,
3. Account opened with expired trade license CD: 763, 720,
1. Account opening form not approved by HOB in most of the cases CD: 752, 767, 762, 766,
which does not comply with BFIU Circular Letter No 01/2017 dated 763, 748, 758, 743, 720,
16.01.2017.e.g. 739, 703, 761, 757, 750,
738, 712, 709, 749, 755,
740, 747, 735, 760.
SND: 106, 108, 107,

2. SS card not uploaded into the system CD: 709,

3. Account opening application form not approved by HOB/MOB CD 751,
4. AOF signed by MOB instead of HOB
5. Authorized signature was not found in Specimen Signature card CD: 703,
6. Personal Information form not approved by HOB in many cases. CD: 767, 762, 741, 703,
e.g.
7. SBS-2 & SBS-3 return form not signed by HOB/MOB in many cases. CD: 741, 703,
8. SBS-2 & SBS-3 return form found blank CD: 752,
9. Account with other bank related information found blank. CD: 721, 734,
10. Particular of allied/sister concern not filled up by account holder
11. Account holder’s signature not verified in AOF CD: 751,
Sl. Nature of lapses Example A/C no.
12. Initial deposit column found blank. SB: 2286,
CD: 752,
13. Residential status not mentioned. e.g. SB: 2320,
CD: 723,
14. Customer’s profession doesn’t match between source of fund and SB: 2334, 2325,
risk grading
15. Stamp not affixed on account operating mandate form CD: 735,
16. Signatory’s instruction not mentioned on signature CD: 735,
17. KYC not approved by HOB/MOB SND: 101,
18. KYC of Mohammad Abul Kalam & Monjur Uddin Ahmed not done CD: 720,
19. As per personal information form Mr. Li Hao Yi’s nationality is CD: 720,
Chinese but his permanent address mentioned in Sylhet,
Bangladesh.
20. Relation With the account not mentioned. SB: 2330,
CD: 734, 743.
SND: 103. SND: 102.
21. Account opening checklist not found .e.g. SB: 2320,
CD: 739,
22. Account opening checklist not signed by official. SND: 101, 100, CD: 734, 725,
726, 730, 736, 748, 767, 762,
766, 763,
23. No account opening related documents were found with AOF SND: 103,
24. AML declaration form not found SB: 2328, 2295,
CD: 767, 762, 766,
25. Customer’s signature not obtained in AML declaration form SB: 2321, 2318,
26. Terms & conditions of AOF not signed by account holder CD: 741,
27. Thanks letter not found with AOF SB: 2334, 2332, 2328, 2327,
2320, 2326, 2325, 2295,
2290, 2285, 2278,
CD: 734, 762, 763, 758, 743,
720, 702.
28. Revised Signature card not updated into the system as per mandate CD: 721,
Branch is advised to take necessary step to avoid similar type of lapses in future and confirm to ICCD. The
branch is advised to check rest of the account opening forms which the audit team did not scrutinize and
also advised to regularize the lapses and confirm to ICCD as per following format if any, at the earliest.
a)

Sl. Type of A/c A/c No. Open Date Lapses, Identified & Rectified Compliance with date

3.3.1 Review and Update of KYC and TP:

As per BFIU circular - 19, dated: 17.09.2017, Section 3.5, page-8, KYC to be updated after every 5 years
for low risk accounts and after 1 year for high risk accounts in addition to regular up-gradation process.
Audit team advised the Branch to update/review KYC and TP of above mentioned lapses of at least 50
numbers of accounts during the course of audit. Accordingly the Branch updated KYC and TP for 40
numbers of deposit accounts.

a. Solvency Certificate:
i. Solvency certificate provided to account holder without obtaining clients request letter in some
cases; e.g.
Sl A/C No. Certificate Date Reference No
.
1 CD 253 23.11.2018 BA/Ring Road/2018
2 CD 560 14.10.2018 BA/Ring Road/2018/1035
Sl A/C No. Certificate Date Reference No
.
3 CD 18 14.10.2018 BA/Ring Road/2018/1034
4 CD 156 14.10.2018 BA/Ring Road/2018/1033

ii. 3 33 /333 3 333333 3 33 3 33 3 3333 3 3 3 3333333 3 333333333333

application. eg . .
Sl A/C No. Certificate Date Reference No
.
1 08633000457 21.10.2018 BA/RR/GB/2018/414
2 08633000007 14.10.2018 BA/RR/GB/2018/402
3 08633000597 08.10.2018 BA/RR/2018/393

iii. Client’s signature not verified on solvency certification application form. e. 3.

Sl A/C No. Certificate Date Reference No
.
1 08634002156 25.12.2018 BA/Ring Road/2018
2 08636000097 26.12.2018 BA/Ring Road/2018/481
3 08633000581 30.11.2018 BA/Ring Road/2018
4 08636000048 25.10.2018 BA/Ring Road/certificate/2018/416
iv. Solvency certification charge not realized. e.g
Sl A/C No. Certificate Date Reference No
.
1 08636000097 26.12.2018 BA/Ring Road/2018/481
2 08633000581 27.11.2018 BA/Ring Road/2018
The branch is advised to check all the solvency certificates and regularize the lapses, if any, at the earliest.

b. Stop payment:
i. Branch does not maintain any stop payment register.
ii. Customer’s signature not verified on stop payment application. e.g
Sl. A/C No. Cheque No. Stopped Date Amount (Tk.)
1 CD 193 AB 2784354 & AB 2784356 09.10.2018 1,530,000.00 &
516,200.00
iii. Payment stopped of cheque but customer’s signature not obtained in the request
letter. e.g.
Sl. A/C No. Cheque No. Stopped Date Amount (Tk.)
1 CD 325 2670867 19.08.2018 200,000.00
iv. HOB/ MOB marking not found on stop payment application. e.g.
Sl. A/C No. Cheque No. Stopped Date Amount (Tk.)
1 CD 325 2670867 19.08.2018 200,000.00
v. Execution time not mentioned on stop payment application. e.g.
Sl. A/C No. Cheque No. Stopped Date Amount (Tk.)
1 CD 697 AB 5448522 10.10.2018 200,000.00
 c. Deceased account:
Branch could not provide the number of deceased account settled during the audit period as well as there
is no record of settlement of deceased account in the branch.

i. No register for deceased account has been maintained by the branch.

ii. Deceased AOF, SB A/c 465 could not provide by the branch for verification and settlement not yet
done.
iii.Banking software i-Staler do not generate any report regarding keeping the record of settled/closed
deceased accounts.
The branch is advised to check all the deceased account and regularize the lapses, if any, at the earliest.

d. Closed Account:

While checking closed AOF on sample basis, following observations were found:
i) Clients Application for account closing not obtained. e.g.
SL Account No Account Title Account closing Date
01. 08633000571 Md. Saladin Bin Rouf 09.09.2018
02 08634000461 Kamrun Laila Eva Md. Fakhrul 06/09/2018
Islam

ii) Customer provided application to close the account and branch official also marked as close
on AOF, but till date of audit the account was found active in the system. Details as follows:
SL Account No Account closing Date Remarks
01. CD 453 30.07.2018

iii) Account closed but AOF was not marked as “ closed account”:
SL Account No Account Title Account closing Date
01. 08633000571 Md. Saladin Bin Rouf 09.09.2018

iv) HOB/MOB Marking not found on account closing application form.

SL Account No Account Title Account closing Date
01. 08634000006 Mohammad Nur Ullah Late z31/07/2018
Mohammad Abdul Karim
The branch is advised to check all the closed accounts and regularize the lapses, if any, at the earliest.

3.3.3 Observation related to Inward & Outward mail register:

a. Initial & date column of Dispatch/Outward mail register found blank in some cases, e.g. Ref. no. 276
dated 29.07.2018, Ref. no. 313, dated 26.08.018, Ref. no. 473, 474 & 475 dated 23.12.2018, Ref.
no. 486 dated 02.01.2019.
b. Initial of the recipient with dates & times of incoming mail register found blank in some cases, e.g. Sl.
no. 659 & 660/18 dated 02.12.2018, Sl. no. 672/18 dated 03.12.2018, Sl. no. 673, 674, 675/18 dated
04.12.2018, Sl. no. 1780, 1781, 1782/18 dated 20.12.2018.
c. Branch did not record customer’s application/request in inward mail register in some cases. i.e. fund
transfer application, Positive pay, RTGS, BEFTN, Request for statement, Solvency certificate etc.
The branch is advised to record all sort of incoming and outgoing in the respective mail registers by
mentioning date and time properly.
3.3.3 Customer Complaint Box.
A complaint/suggestion box was found placed in the customer service area of the branch. The keys of the
complaint box were lodged to our ‘Central Compliant Unit’ at corporate office. The branch management
informed verbally to the audit team that no complain was lodged by the customers during audit period.
The branch is advised to monitor the complaint/ suggestion box regularly and meticulously comply with
the BOD circular no. Instr./2015/BOD-12/2015 dated 03.02.2015.
 3. 3. 4 Calendar of Return:
No calendar of returns maintained by the branch. Branch is advised to maintain Calendar of Return and
submit all required reports to the specified authorities in due time.

3.5 FIXED ASSETS:

According to Trial Balance dated 31.12.2018, total fixed assets of the branch were Tk. 5,043,926.83. In
the area of fixed asset of the branch following lapses were observed during the inspection. A list of Fixed
Assets of the branch is given in the Annexure- K.
i. As on 31.12.2018 the amount of depreciation and written down value (WDV) of fixed assets differ
between Fixed assets module and Trial balance as per following details:

Sl. Particulars As per FA Module As per TB Difference

1 Depreciation 3,974,862.41 3,991,643.26 16,780.85
2 Written Down value 5,085,956.83 5,043,926.83 42,030.00

ii. Asset identification numbers were not affixed on the fixed assets.
iii. Physical verification on fixed assets was not conducted.
iv. List of obsolete items was not maintained by the branch.