1. AMIT BACCHAWAT TRAINING FORUM
Bank AUDIT
AMIT BACCHAWAT TRAINING FORUM

2. TYPES of audit
Statutory audit
Concurrent audit
RBI audit

4. Match the followings Term loans Long term, Floating rate
CC, OD and Demand loans
Bills Discounted/ purchased
Participation on risk sharing
Interest bearing staff loans
Long term, Floating rate
Short term, generally fixed rate
Bills receivable discounted with bank
Transactions b/W bank-participation certificate
Loans to staff

5. Advances NATURE FUND BASED NON FUND BASED NATURE Term loans
CC, OD and Demand loans
Bills Discounted/ purchased
Participation on risk sharing
Interest bearing staff loans
Short term, generally fixed rate
Transactions b/W bank-participation certificate
Loans to staff
Long term, Floating rate
Bills receivable discounted with bank
NON FUND BASED
NATURE
Letter of credit
Bank guarantee
Bills for collection
Guarantee from one bank to another
Guarantee from bank to third parties
Bank collects your bill from buyer/ buyers bank

6. Difference b/w CC and OD
Corporates
Security- generally Current asset
No separate fee
Generally working cap requirements
Separate account
Generally individuals + corporates
Anything- mostly fixed assets
Fees on overdrawn amount
Any purpose
Same account

7. Classification of advances
Sector wise
Priority
Non priority
Security wise
Secured
Unsecured
Prudential norms
Standard
NPAs
Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.. This is essentially meant for an all round development of the economy as opposed to focusing only on the financial sector.
Most important for exams

8. ADVANCES PER PRUDENTIAL NORMS
STANDARD LOAN
1.7.19
1.5.19
SMA1
1.6.19
SMA2
Loan given
SMA 0
3 months
Repayment due
NPA
Doubtful 1-3
NPA
Substandard
Doubtful 1
1.7.21
1.7.23
1.7.20
40%/100%
15%
25%/100%
100%/100%
Doubtful more than 3
1.7.24

9. DRAwing power
Drawing Power generally addressed as “DP” is an important concept for Cash Credit (CC) facility availed from banks and financial institutions. Drawing power is the limit up to which a firm or company can withdraw from the working capital limit sanctioned. Updating drawing power for working capital by the bank is an important credit monitoring exercise.

10. Allocation of loan taken by Vijay Mallya

11. Mode of security creation
MORTGAGE

12. Mode of security creation
HYPOTHECATION

13. Audit of advances Areas to be covered What to do
Advances are o/s- not fictitious
Amount is receivable by bank
Documentation is proper
No unrecorded advances
Valuation is proper, provisioning is as per norms
Disclosure is correct
Study internal controls
Review loan documentation
Reviewing operation of accounts
Examining Existence, enforceability and valuation of security
Checking Compliance with RBI
Analytical procedures/ substantive testing

14. Internal controls
Whether bank has satisfied itself as to the credit worthiness of the borrower
Sanction from appropriate authorities of bank
Necessary documentation before advance is made.
Compliance with terms of sanction and end use of funds.
Sufficient margin as specified in sanction letter to be ensured. If registration is required, it should be done in the name of bank.
Dp register to be checked and updated every month.
Irregular accounts to be brought to the notice of concerned authority.