Audit of Banks
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 May 2011
Your firm has been appointed as Central Statutory Auditors of a Nationalised Bank. The Bank follows financial year as accounting year. State your views on the following issues which were
brought to your notice by your Audit Manager:
(a) In computing the aggregate of funded and non-funded exposure of a constituent for purpose of assigning risk weight in regard to capital adequacy, the bank "Netted off' the credit balance of Rs. 10 lakhs in their Current Account against the total exposure of Rs.1crore.
Pls provide answer with conclusion for above question.
brought to your notice by your Audit Manager:
(a) In computing the aggregate of funded and non-funded exposure of a constituent for purpose of assigning risk weight in regard to capital adequacy, the bank "Netted off' the credit balance of Rs. 10 lakhs in their Current Account against the total exposure of Rs.1crore.
Pls provide answer with conclusion for above question.
18 May 2011
it cannot be netted-off because risk exposure under different criterios are different, therefore,it cannot be netted off. Rs10 lakh is in current a/c while total exposure includes non-funded exposure too(which includes even notional principal for deriviative trading)
Therefore, netting off not permissible
Therefore, netting off not permissible
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- House Property Reporting in ITR
- TDS Claim year
- TDS Challan Code
- Relief u/s Section 89
- Rent lease agreement
- GST Rate applicable for 0% Food Items sold by an Industrial Caterer
- CCFS 2026 Schemed
- Entries in AIS regarding sale of units and shares
- Merchant Export Accounting
- Lease agreement and tax on sale
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
