AUDITING DEPOSIT PORTFOLIO

 

The Most vital part of Inspection involves Auditing of Deposits, Advances (Credit) and Non-Performing Assets categories of a Bank/Branch.  In this Post, I shall give you a few guidelines to be followed for auditing of Deposit Portfolio of the Branch.

Know Your Customer (KYC):

 

Verify the following:

 

• Whether prescribed Account Opening Form (AOF)  obtained and held on record?

• Whether the AOF is duly filled in and signed by the Applicant showing intention to open a Deposit account?

• Whether recent Photograph(s) are obtained and affixed in the AOF?

• Whether self-attested address proof, ID Proof have since been obtained and verified with originals?

• Whether copy of PAN Card or Form 60 has been obtained and verified with original and also in the Income Tax Department website about the genuineness (in case of PAN Card)

• In case of non-resident Indian, whether copy of the valid Passport has been obtained and verified with original?

• Whether copies of Constitution (in case of Proprietary/Partnership firms), Board Resolution along with name and signatures of the person(s) authorized to operate the account etc. are obtained and verified?

• In the case of Public Limited companies, whether the Branch has obtained the Certificate of Incorporation and verified in the Corporate Affairs Ministry website and confirmed the genuineness?
  

• Whether copy of Registration Certificate of the Partnership or Trust, as may be the case, is obtained and verified?
  

• Whether Memorandum of Association has been obtained (in case of Private Limited Companies) and verified by the Branch officials?

• Whether the applicant (in case of opening a Current Account) has disclosed the details of credit facilities, if any with other Banks/financial institutions?
  

• Whether the authorised Branch official has confirmed the above verification along with signature and date of verification?

• Whether independent enquiries have been made to confirm genuineness of the applicant and have been recorded?
  

• Whether risk profile has been assigned to the Account holder?

• After account opening whether Letter of Thanks has been sent to the Account Holder(s) and Introducer, if any, by Post/Courier to the address available on Bank's records?
  

• Whether correct Rate of Interest is entered in the Account Master of the System?

• Whether Nomination form is duly filled in, entered in the system and acknowledgement given to the Account holder(s) with Registration Number?

• Whether proper permission has been obtained for opening accounts of high risk customers such as dealing with Antiques, etc.?

• Whether there are no accounts opened in fictitious / bogus names?

• Whether the prospective account holder has shown intents to get ATM Card, Credit Card, Internet Banking facility and for other digital operations?

• Whether Mandate for operation has been appropriately mentioned in the AOF and the account operations are properly filled up in the Account Master?

• Whether Specimen signature Card along with photograph of the account holder(s) scanning  has been completed in the system?
  

• Whether the prospective account holder desires to have Cheque Book facility and given his intention in writing?

• Whether Cheque Books are issued to the account holders against proper acknowledgement?

• Whether the Branch has obtained proper authorisation letter fromthe account holder(s) for handing over the cheque books to a third party?

 
 

• Whether the Branch has obtained proper letter along with necessary proof for reverting the Status of the account from Inoperative/Dormant category to Active and verified with originals, duly affixing the signature of the authorized Official?

• Whether proper cooling period norms are observed in case of newly opened Deposit accounts?
  

• Whether withdrawals are allowed within the stipulated threshold limit as per Central Management guidelines and Loose Cheques are issued against proper request and acknowledgement of the Account Holder(s)?  

• Whether the Branch has been following the stipulated guidelines for issuing Loose Cheques?

• Whether the Branch is recovering the Service Charges for issuance of cheque books and extending ATM Card, Mobile Banking facilities?

• Whether high value/suspicious transaction reports are being generated by the Branch on day-to-day basis and verified and reported to Higher Office?

• Whether there are no debits made to Inoperative/Dormant accounts without the approval of the Branch Head or Authorized Officer of the Branch?

• Whether requests for change of address, addition/deletion of names in the accounts are entertained only  after obtaining necessary letters/proof from the existing account holder(s) and with the consent of the authorized Officer of the Branch?

• Whether there are no overdue Term Deposits in the Branch? and if any found, the Branch should be advised to get them renewed as per the Policy guidelines of the Bank.

• Whether the Branch is allowing Temporary Overdrafts in select customers' accounts and the TODs are adjusted within the stipulated period?  Long outstanding/un-adjusted TODs to be brought out in the Audit Report.

• Whether unissued Cheques, ATM Cards, Internet Banking User id kits, etc. are properly recorded and whether this tallies with the physical inventory?

• Whether Death Claim Settlements are made strictly as per the guidelines of Central Manager at appropriate levels?
  

• Whether Tax norms are strictly followed in case of Term Deposit accounts and TDS deducted are properly remitted to Income Tax Department as per the time norms?

• Whether Tax returns are properly filed with the Income Tax Department website within the stipulated time period and copies are held on Branch records?