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Though, everybody shows to be surprised when the news of a Bank CMD with CBI, LIC Hsg some time back, the features of this naturewill be observed everywhere in routine financial activities, starting from the base level of the branch till the last layer as above. The percentage may varythe number of instances may vary, but they are every where to look after theopportunity to strike. The instances are on rise recently as the integrity of work, loyalty with organisation, general public & national interest in mind, is lowering and desire of easy and fast money is increasing.

This is an attempt to narrate, the possible indicators to find out the presence of adjustment features in advances sanctioned. The indicators may not turn out to be an adjustment always but a second thought or little awareness towards them will definitely saves the public money ,the reputation and the interest of the organization.

Advance to borrower having short relationship with the bank/institution.

The fresh sanction of the advances with in six months, one year from the opening of account. The accounts having short history, relationship with the bank.

Shifting for enhancement/ new advance from bank to bank.

Now a days, number of accounts, shifted from one to another bank on the pretext of better rate of interest, additional finance, quick, fast sanction compare with other, non satisfaction of services rendered, competitive service charges and saving in cost, less or reduced formalities of monitoring , submissions. Unless, correct reasons of the shifting are ascertained with the communication of previous bankers the same may be the reason on paper and the correct reasons are unknown thereby risking the advance.

Non ascertaining, and or mentioning the actual business activity on records.

A borrower doing job work without martial will asking for working capital finance on the primary security of inventory. Leverage in sanction of finance without ascertain the correct assessment and type of limits required for a particular business and their requirements.

The borrowers related firms/ associate concerns/sister concerns having same and or adjoining business addresses and same line of activity:

Two company having office at same address or having address as Ground Floor, for one and first floor for the other in the same building or adjoin areas. Related concerns having same business activity.

Sanctions to the companies under same management in the short span i.e. within same financial year:

The reasons of non working the advance proposal simultaneously for all the allied concerns to be thoroughly looked in to. It may possible once the procedure in known the other proposals line up in a short period of time.

Frequent Adhoc/ Excess with in short period from the original sanction:

The adhoc/ excess may be given to adjust the interest or overdue position. This also reflect the inheriting financial indiscipline/management of the advances. The advances is generally sanctioned taking in to account the requirement of the borrower for the forthcoming full year as such the additional finance immediately thereafter will be looked suspicious.

Transaction in the account not related to the business activity:

A scrutiny of the operations in the new account may revel that the transactions entered in to are not related to the business activity. Frequent transfer from one account to another account, transfer to and fro to the same account, transfer to and fro from account of different branch of the same bank. Transactions entered in to to brought the account in order just before the further sanction of Adhoc and or enhancement. Transactions at the end of the quarter and year end to brought the account in order and saving the same from reporting in any reports.

Accounts giving disproponiate/ high income on account of other income:

This shows requirement of frequent discounting, collection charges, cheque return charges, thereby indicating and adjustment of excess portion and adjustment.

All clean Reports:

Such accounts has tendency, to look after all the reports of the bank, Pre sanction, post sanction, stock audit, their statutory audit, and all other reports reflects no adverse features, or observations in the account as the requirements of reports are taken care in high-level and propriety basis.

The records, books of accounts, purchase, sale vouchers, bills, stock records all are kept neatly, tidy, and presented as and when asked for. The certified statements, monthly stock and other statements, QIS and other monitoring statements duly submitted and submitted in time.

If any deficiency is observed, the same will be corrected before reflected in the report. All clean is the highest tendency and main guiding principle of such  these accounts.

The directors having number of companies floated in a short span:

There are same directors, family members, relatives, closed friends, and the group of people formed various companies , firms, with in a year and have same and or different combination of above persons having same line of activity or similar line of business activity.

The above are possible indicators of an adjustment accounts. A second thought on each of them before sanction will take care of adjustment in accounts. It is advisable, not to sanction immediately after study of proposal. Give a gap of at least three days for thought process before venturing in these accounts.


Though, the culprits are small in number and deeds they have capacity to destroy the image of majority good.

CA.Satish C Badve.

B.Com. F.C.A. D.C.M. D.I.S.A.


Published by

CA Satish Badve
(Professional Practice)
Category Others   Report

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