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Concurrent audit means doing the examination of the financial transactions at the time of happening or
parallel with the transaction. It is part of a bank’s early warning system to ensure timely detection of
irregularities and lapses. It helps in preventing fraudulent transactions at branches. here the check list
and procedure, I hope you will find this information helpful
Index:-
Other Deposits
Loans:
Home Loans
Personal Loans
Vehicle Loans
Educational Loans
Gold Loans
Cash Credit
Over Draft
Vouchers
Forex
Cash Verification
Locker summary
Income Leakage
5. Account number, Customer ID and account opening date is entered in application or not
7. Check in CBS with account number PAN or Form 60 is entered or not and signature and photo is
scanned in CBS
1. If current account opened in the name of individual the procedure is same as SB but PAN must be
taken here
2. If current account opened in the name of business or firm or any other body by individual the
procedure is same as SB but here PAN of individual and business or firm of any other body proof should
be taken EX: PAN, GST, Firm registration
3. If current account opened in the name of business or firm or any other body by partners the
procedure is same as SB but here PAN and Address proofs of the all partners also taken and all partners
agreed for one managing partner in their letter head, and business or firm of any other body proof
should be taken EX: PAN, GST, Firm registration
Deposits:
2. Check whether Customer ID, account number and date of deposit should be in application
5. If the Customer is already done KYC with the bank, then no need to take again KYC again.
Loans:
Home Loans:
Verify the below mentioned documents are submitted by the borrower at the time of taking loan from
bank
1. Borrower & Guarantors’ profile with Photographs, ID & Address proof copy.
11. CERSAI
13. Approval of the name of the builder from circle head is available in case of purchase of house/flat
from a builder
17. Check whether the following charges are duly collected or not
Processing charges
Documentation charges
Inspection charges
Mortgage charges
22. Photo of the building / flat under construction are obtained at each stage of construction and
countersigned by branch official who has visited the site with DATE & SEAL.
23. The site inspection is done on a rotation basis by the branch officials at each stage of construction.
24. The work completion certificate issued by the builder is countersigned by the architect at each stage
of disbursement.
25. Bills/vouchers (in detail) are submitted at the time of each disbursement
28. Check repayment schedule. Repayment should be start after 12/15/18 months. As the case may be.
Financial Documents:
For Salaried Individual: 3 month salary slip, Form 16 and bank statement
For Self-Employed Individual: IT returns for last 2 years along with computation of income tax for past 2
years certified by a Chartered accountant
For Self-Employed Non- Professionals: IT returns for last 3 years along with computation of income tax
for past 2 years certified by a Chartered accountant
Personal Loans:
Verify the below mentioned documents are submitted by the borrower at the time of taking loan from
bank
1. Borrower & Guarantors’ profile with Photographs, ID & Address proof copy.
7. Bank pass sheet for the last 6 months are obtained and verified.
Salaried Individuals: Latest 3 month’s Salary Slips and Form 16, Bank Statements of 6 months
Self Employed Individuals: Latest 1 year bank statement for both savings and current account
Processing charges
Documentation charges
Inspection charges
Vehicle Loans:
Verify the below mentioned documents are submitted by the borrower at the time of taking loan from
bank
1. Borrower & Guarantors’ profile with Photographs, ID & Address proof copy
7. Original Invoices.
8. Copy of RC
11. DPN
15. In case of second hand vehicles, valuation certificate from reputed automobile industry.
14. Check whether the following charges are duly collected or not
Processing charges
Documentation charges
Inspection charges
Mortgage charges
Educational Loans:
Verify the below mentioned documents are submitted by the borrower at the time of taking loan from
bank
5. CIBIL of guardian/parents.
8. Loan quantum is restricted to 10 % of the total tuition fee of the entire course.
9. If the student is a minor, the loan is to be granted only to the parent/guardian and undertaking letter
obtained from the minor on attaining majority?
10. Yearly progress reports/ course completion certificate/ employment details are obtained.
11. Check whether the following charges are duly collected or not
Processing charges
Documentation charges
Inspection charges
2. Deposit bond or Passbook should be surrender to the bank by the customer who are taking loan from
bank
4. Interest Rate should be greater than the deposit interest as per bank norms
Cash Credit:
Verify the below mentioned documents are submitted by the borrower at the time of taking loan from
bank
1. Sanction letter.
2. Borrower & Guarantors’ profile with Photographs, ID & Address proof copy.
3. PAN Card copy of borrower & guarantors.
7. Proprietorship letter/ Partnership deed/ MOA/AOA (as the case may be)
13. Check that stock, creditors & book debts statements submitted by the borrower is in prescribed
format
14. Ensure that Debtors are classified age-wise & only below 90 days (in most cases) debtors are allowed
for DP(Drawing Power) purpose.
16. CA certified debtors statements/QIS (Quarterly Information System) are obtained quarterly/half
yearly (as the case)
17. Verify Stock, Creditors & Book Debts statements from financial statements.
19. Ensure that stock/book debts statements are submitted timely by the borrower. Otherwise charge
penal interest on daily o/s balance.
27. Check that inspections are carried out at periodic intervals & inspection report is on record.
31. Check that party is utilizing the limit. (Otherwise commitment charges)
34. If account is running overlimit for more than 90 days, ensure that account is treated as NPA.
35. If review due / stock statements not submitted by the borrower for more than 180 days, ensure that
account is treated as NPA
37. Check whether the following charges are duly collected or not
Processing charges
Documentation charges
Inspection charges
Mortgage charges
1. Verifying whether the deduction of tax at source (TDS) from interest income on Term Deposits is done
as per laid down procedure. If not deducted, then verify whether Form 15H/15G received or not.
2. Verifying whether TDS has been deducted on salaries made by the bank
3. Verifying whether appropriate GST has been collected on concerned items correctly such as If branch
is running in rented premises then GST has been paid on rent by the branch likewise….
4. Both TDS & GST challans has to be verified by the concerned person every month
Voucher:
2. The auditor should see whether all vouchers are consecutively numbered.
3. The auditor should check date, name of the party to whom the voucher is issued, the name of the
party issuing the voucher, and the amounts, etc.
4. The vouchers, which are inspected by the auditor, should be cancelled by a stamp so that it cannot be
produced again
5. The auditor should pay special attention to those vouchers, which are in the personal name of one of
the employees or manager of the bank.
6. In case of vouchers, which require detailed checking, the auditor should put special mark on them. He
should check such vouchers carefully.
7. The auditor should see that a responsible senior officer of the concern passes every voucher correctly
and the rubber stamps are affixed. He should also see whether the responsible official signs them.
9. The auditor should not take the help of the employees of the concern while checking the vouchers
10. The auditor should also see that the figures and words of the amount in the vouchers are the same.
11. The vouchers for insurances, rates, and taxes, etc. should be checked by the auditor with reference
to the period for which the payment has been made. In case of payments in advance, the auditor should
see whether correct adjustments have been made.
12. The auditor should check whether the borrower is mentioning pan numbers on deposits which
are >50,000/-.
13. The auditor should check whether the borrower has signed properly in the voucher at appropriate
places and that signature has been crossed by the appropriate banker or not
14. The auditor should check whether daily vouchers have been updated in CBS or not.
Forex:
1. In forex, we look through the exchange rate change and their correct valuation in books.
2. Check whether any availability of foreign exchange with bank & check calculation of profit and loss in
foreign exchange.
3. There are some RBI guidelines regarding foreign exchange and we have to see the adherence of same.
Gold Loans:
1. Gold loans are given to persons who secured gold with bank
2. Check whether processing charges are collected as per Percentage as decided by the concerned bank
4. Check whether rate per gram have been given correctly or not by the bank
5. Weighing of gold have been checked by the concerned auditor person on random basis to confirm
whether the bank have been weighed correctly or not
7. Check whether all borrower details have been correctly filled in the appropriate gold loan document
& whether borrower has signed in appropriate places or not & whether the borrower has given required
proofs like aadhaar & PAN etc
8. See whether appropriate gold loan ledger has been maintaining by the bank or not?
Cash Balance:
1. Every morning we have to check the cash balance of Cash Book of Bank in which all details regarding
cash balances are written on daily basis which is authorized by manager and cashier.
2. Once in the month we have to do physical verification of cash in hand with bank and ATM (if any)
surprisingly and if any discrepancy found shall be reported in the report.
Lockers:
6. Ensure that Number of visits to locker by the customer does not exceeded the prescribed visits, if
exceeds check whether bank had collected prescribed charges.
7. See that locker rent is collecting as per locker size (i.e, Small, Medium & Large)
Income Leakage:
This is the most important and sensitive part of concurrent audit. In most of the banks there are some
income leakage and we have to find out that.
Generally income leakage arises due to following reasons and we have to look that:
1. Undercharge of processing fee, upfront fee and other charges by the bank during disbursement of
loans.
As an auditor →
We have to generate various MIS reports from the system and analyze them.
If bank undercharges the fees then it lost its income & the performance of the bank looks very weak
which leads to downfall in market share.
On the other hand, if bank does overcharge of such things then the false performance of bank is shown
and customer may be misguided due to this.
It is the prima facial duty of auditor to shoe the true and fair performance of the clients.