BANK BRANCH AUDIT - Analysis of AFS recd for renewals in cc limit borrowers file

*Analysis of AFS recd for renewals in cc limit borrowers file:*

1. Fig. of closing stock n debtors differ as compared to stock n BD submitted. So DP for m/o april, might be availed in excess.

2. Closing Balance of limit on 31.03.2022 not matching wd the bank st. Ask for Reco.

3. Cash in hand is far huge as compared to limit balance. Reason why cash not being deposited into limit account.

4. List of debtors show few parties balances long pending n stuck as compared to last 3-5 yrs. Prudently, No DP to be allowed on debtors o/s for more than 1 yr. Take list of debtors from tally for last 3-5 yrs.

5. Sale as per PL is 5 cr, while routed only 2 cr in limit account. Wt abt 3 cr while bsheet shows no other limit or current account wd other banks?

6. Bsheet shows other current acc. running wd other banks. What was the need to open? Opened before or after limit sanctioned initally. It must be closed immediately.

7. Creditors as on 31.03.2022 are far in excess of balance of closing stock. If goods purchased on credit, where the limit being used. *Leading to doubt of "end use of funds" n double finance of same stock.*

8. Net profit below 8% but no 3cd filed to income tax. Why? Chk Tax audit fee in PL.

9. Negative capital balance of prop. or partners. Business being funded by limit n unsecured loans only. Wt abt borrowers contribution maintenance to business.

10. Reflecting Long pending statutory dues like gst, esi, pf, tds. Penalty fines late fees paid. Refer Caro.

11. Refer to Notes, for types of related party transactions specially relating to creditors, debtors, L&A, Investments.

12. Closely Scan that cc limit bal. O/S in not stuck in long term assets or investments.

13. Current accounts dr or cr. with other banks reflecting in bsheet. Ensure Cc limit bal. is not transferred there by perusal of cc stat.

14. Investments or Loans and advances showing loans to directors, partners, friends or non-business activities. Leading to a doubt of limit being further financed.

15. Check Sch. of FA for additions during the year. Ensure not been biught out of cc limit.

16. Refer to CARO for differences in qtr stocka submitted to bank and in books. Cross verify with stock st. submitted and ask BM for correct calc. of DP. Declare MoC if needed.

17. Review/renewal remarks or comments of BM on AFS to agree or disagree for further allowing of limit.