Bank Branch Audit Program for the year ended March 31, 2022

Name of the Bank and Branch:

Region/Zone in which the Branch is located:

Date of Commencement: Date of Completion:

Audit Team Partner/s:

Name of Seniors Man Days Initials Remarks, if any

Name of Juniors Man Days Initials Remarks, if any

Details of the Authorized Persons of the bank Branch Manager:

Others (Specify):

Audit Aspects Covered By Whom Extent of Check

General
1. Engagement letter to the appointing Authority
and letter of requirement to the Branch.
2. Letter for NOC to previous auditors
3. Meeting and discussion with the bank branch
management and understanding the profile of the
branch and its business and take a note on the
same.
4. Letter of requirement to the Branch.
5. Review of
 previous year's audit report/ LFAR
 current period's Internal Audit
Report/Concurrent audit Report
 RBI Inspection Report
 IS Audit Report
 compliance of the branch to all of the
above
 and any other report and their
compliance.
6. Physical verification of
 Cash
 Gold
 Stationery,
 and valuable securities.
7. Note down
 Shortage of cash appearing in Trial
Balance;
 Difference in physical verification of
gold.
8. Reconciliation of the current account
maintained with other banks /Reserve Bank of
India
9. Reconciliation of NOSTRO account with
Nostro Mirror Account
10. Physical verification of Investments, holding
statements,(obtain certificate from bank
manager for the same). If investments are
held /done by the Branch
11. Verify reconciliation statement to verify
entries originated prior to, but communicated /
recorded after the year end in relation to
currency chest
operations at the branch/other link branches,
involving deposits into/withdrawals from the
currency chest attached to such branches.
12. Understand the system in CBS at branch
 verify controls;
 verify exceptional report;
 understand the editable & un editable
fields at Branch;
 system of downgrading & upgrading of
accounts;
 interest calculations;
 Generation of reports relating to advances
classification and Capital Adequacy
calculation, etc.

13. Compliance of instructions issued by bank’s

year and closing circulars, other relevant internal
instructions/circulars, Master circulars and other
notifications issued by RBI, significant
accounting policies of the bank Mandatory
Accounting Standards/Auditing Standards and
other notification.

14. Prepare a list of various closing returns to be

verified and certified, and then checking of the
same during the audit
Checking of Balance Sheet Items
1. Checking of the advances:
i. Take list of all advances along with
facility wise limits, outstanding, Name of
Lead bank, Credit Rating, Credit
summations in the account, last date of
submission of stock statement, date of
review of account, etc. This shall help to
select the accounts for scrutiny in detail.
ii. Critical review of all large advances and
their reporting as per prescribed
iii. Classification of advances as per IRAC
norms.
iv. Latest valuation of securities in favour of
the bank against advances.
v. Provisions on NPA as per IRAC norms.
vi. Review of all major restructured cases
along with the compliance of norms as
per RBI Guidelines.
vii. List of all SMA 2 accounts (and other
accounts mandated for reporting) and
reporting of the same to concerned
authorities (CRILC).
Loan Accounts (Performing)
i) Review of all large advances with balance of
lower of 10 % or Rs.10 crore of total advance.
ii) Review of loans sanctioned during the year.
Also verify all the credit card dues which are
overdue.
iii) Review of other advances on test check basis.
iv) Review of adverse comments by Concurrent
auditors, RBI/internal inspectors and the reply
given and corrective actions taken by the branch.
v) Review of suit filed and decreetal accounts
and provision and progress thereof and
Classification
vi) Review of accounts upgraded during the year
from NPA to standard. and ensure full recovery
of total overdues before upgradation.
vii) Review of all accounts frequently exceeding
limits/DP and watch-list accounts.
viii) Also verify all the credit card dues which
are overdue & debit balances in SB A/c.
ix) Check Drawing Power calculation in detail as
per the norms of the bank.
x) RFA & EWS marked accounts need
additional attention

Loan Accounts (Non-Performing)

i. Review the accounts which are classified
as NPA during the year w.r.t Security
Value, Interest Reversed, Date of NPA,
provisioning thereon etc.
ii. Review the annual stock audit report for
the NPA with balance of Rs.5 cr. and
above & latest valuation report for the
immovable properties in case the
valuation is older than 3 years
iii. Accounts under Forensic audit or under
IBC proceedings
NOTE:
(i) Following aspects of the advances to be
verified:
Pre sanction: System of credit Appraisal and
review / renewal.
Post sanction: Compliance of terms of sanction,
documentation, end use of funds.
Monitoring: Stock and Book statements,
drawing power, insurance, inspection of
stock/security, operations in the account, etc.
(ii) All the accounts verified in category (i) to (x)
should be documented.
2. Verify controls in respect of the following
important items of assets.
(i) Dual custody of cash;
(ii) Custody and issue of /pay orders/other
stationery items etc.;
(iii) ATM cash as per books and actual balance
tallied at year end.
(iv) Accounting treatment for excess/shortage of
cash in ATM

3. Fixed Assets
i. Checking of additions /
deduction/transfers of fixed
assetssupported by proper bills/invoices
and confirmation of date put to use.
Assets transferred to and from other
branches. Compliance of Accounting
Standard related to fixed assets.
ii. Checking of Depreciation on additions,
deduction during the year and on existing
assets as per the policy of the bank.
iii.Verification of Fixed Assets Schedule for
furniture & fixtures and other assets and
reconciliation with figures appearing in
the Balance Sheet and FA management
software used by the bank (if any).
4. Deposits and Liabilities
 a) Verification of Anti Money Laundering
guidelines and Compliance with KYC
norms on test check basis that overdue
deposits and inoperative accounts
b) Check TDS compliance on the interest
paid and on test check basis checking of
Form 15G & 15H and confirm whether
those forms are submitted with respective
Income Tax Authority;
c) Movement of Deposits vis-à-vis
movement in interest expense
5. Inter-Office & Suspense A/c:
1. Reconciliation of accounts with other
banks, head office and inter branch
adjustment accounts
2. Inter Office Reconciliation (IOR)
Accounts:
i. Verify Inter Branch Items In Transit
(IBIT) account for old entries.
ii. Compare on test Check basis, the
balance and the entries in IOR
Accounts with the copies of the
statements submitted to the IOR
department/s.
iii.Old unreconciled entries are being
provided/ reported to HO for provision
3. Detailed checking of suspense accounts –
credit as well as debit schedules. i.e.,
Nominal ledger.
Balance Sheet Finalization:
1. Verifying Balance Sheet figures with General
Ledger
2. Casting of Balance Sheet and cross checking
with Balance Sheet schedules
3. Scrutiny of Balance sheet, particularly-
i) that all the balances are shown in proper heads
and broadly compare previous year figure to
understand material variance;
ii) Check for any negative balance in the trial
balance (i.e. assets / expenses having credit
balances and liability / income having debit
balances)
4. check in case of advances:
a) That interest accrued but not due on loans is
not included in advances.
b) That credit balances in O/D,C/C in-operative
current accounts should not be netted off with
advances and the same should be shown under
demand deposits.
c) Adequacy of provisioning, in case it is done at
the branch level.
5. Checking,

(i) Liability under Bank Guarantee /L/C and

effects of expired BGs/LCs..

(ii) Reconciliation of General Ledger and

Subsidiary Ledger.
Checking of Profit and Loss Items :
1. Test checking of interest on deposits,
(particularly, Interest checking should be done
on test basis for the period subsequent to the
period of revenue/ concurrent audit). Ensure that
interest
provision on overdue F.D. has been made as per
latest RBI guidelines. Check the system is
properly
configured to check the interest calculation and
the changes in interest rate is changed in system
on respective dates.
2. Test checking of interest/ commission on
various advances, bills, L.C., Guarantees, etc.
3. Test checking of discount/ commission on
bills discounted and others income like
commitment
charges, processing fees, recovery of insurance/
legal fees etc.
4. Derive various ratios of items of income with
comparable and related assets (like Avg. Interest
Income to Average Advances etc.) and verify
major movements or variances.
5. Checking of interest in NOSTRO Accounts
debit balances.
6. Verification of recovery and accounting for
locker rent, other income, staff accommodation,
etc., with details of arrears, if any.
7. Commission income on account of
Government Business, i.e., collection as well as
remittance of
Income tax, sales tax, excise duty, etc.,
8. Details of Prior Period items of Income as
well as expenses and complete details of
provisions to be made, if any.
9. Booking of Interest Income on account of
partial recovery in NPA’s.
10. Note down the reasons for material
variances, if any.
Others:
1. Checking of statement of frauds adequacy of
provision, timely reporting to competent
authority,
recovery and movement in balances.
2. Checking of statement of claims against the
bank not acknowledged as debt.
3. Checking of Foreign Currency forward
exchange contracts showing sales and purchase
separately. Review of NRE and FCNR accounts,
if any.
4. Checking of Guarantees given on behalf of
Constituents.
5. Checking of Acceptance, endorsements and
other obligations, i.e., L/C and bills accepted by
the bank on behalf of customers.
(Particularly check in case of Clause 4 and 5 above, whether the above guarantees and LC issued are within the powers of the authorised person
and proper procedures have been followed for issuing the same. Review the position of the above as at the year-end)
6. Other contingent liability, if any.
7. Checking of and preparation of Interest
Subsidy certificate (as per various RBI &
Government
schemes), correct accounting & whether the
same are given to the eligible, borrowers.
8. Checking of write off proposal and DICGC
claims, sharing of recovery, etc.
9. Checking of annual returns on protested bills/
recalled debt accounts (PB/RD).
10. Checking of LFAR schedules and
preparation of LFAR (Detailed planning for
preparation of LFAR be done at the time of
commencement of audit).
11. Checking of Tax Audit annexures and
preparation of Tax Audit Report.
Final Audit and Reporting:
1. Preparation of Audit Report as per format
prescribed by ICAI under SA 700 (Revised) and
under any other regulatory authority.
2. Preparation of memorandum of changes for
changes to be made in classification of advances
and in any item of asset/liability and profit and
loss account with other remarks and/ or
information which requires further attention at
Regional/Zonal Office level.
3. Preparation of Tax Audit Report.
4. Preparation of Long Form Audit Repor. (by
giving annexures where ever necessary).
To Collect the following Certificates:
1. Physical verification of the fixed assets
carried out on March 31, 2022/During the year.
2. Physical verification of Investment is carried
out on March 31, 2022/ During the Year. If
investment are held or appearing in the Trial
Balance.
3. Physical verification of the cash & other
items as on March 31, 2022.

4. Written Representation Letter.

To verify and issue the Certificates (as applicable): Illustrative list

1. Certificate of Ghosh and Jilani Committee

Recommendations.
2. Certificate giving details of claims lodged
with DICGC / ECGC however, rejected by
them.
3. Risk weighted assets as per the capital
adequacy report (BASEL II& III).
4. Certificate for treating an account as bad or
doubtful of recovery as per the requirement of
DI and CGC.
5. Subsidy claim under Prime Minister Rojgar
Yojna Or any other scheme of the Central/State
Government.
6. Certificate for Interest Subvention.

7. Other additional certificates as may be

prescribed.

Prepared by: Reviewed by: