Bank audit
This query is : Resolved
27 November 2012
I have received a letter from RBI mentioning the following:
Annual Financial Inspection Under Section 35 of the BR Act, 1949 –
Bank – Position as on March 31, 2012 – Divergence in Asset
Classification.
It is observed from the captioned report that in respect of some
borrowal accounts (details enclosed) there is a divergence in asset
classification. You are advised to let us know by return mail as to
how this divergence in classification had occurred.
how to dealt with this.
Annual Financial Inspection Under Section 35 of the BR Act, 1949 –
Bank – Position as on March 31, 2012 – Divergence in Asset
Classification.
It is observed from the captioned report that in respect of some
borrowal accounts (details enclosed) there is a divergence in asset
classification. You are advised to let us know by return mail as to
how this divergence in classification had occurred.
how to dealt with this.
CA. Subhash Dangi
(Expert)
27 November 2012
Your query is not specific about nature of classification of assets. Detail of encloser not given.
You need to substantiate your classification of assets with supporting documents and evidence on your records or audit papers.
With a view to divergence in asset classification arising out of difference in assessment of the value of security, service of principal and interest, and above stock audit at annual intervals by external agencies appointed as per the guidelines approved by the Board would be mandatory in order to enhance the reliability on stock valuation.
Collaterals such as immovable properties charged in favour of the bank should be got valued once in three years by valuers appointed as per the guidelines approved by the Board of Directors.
Reply to the said letter to highlight your views on asset classification and divergence if any along with supporting data, papers or information for justification.
You need to substantiate your classification of assets with supporting documents and evidence on your records or audit papers.
With a view to divergence in asset classification arising out of difference in assessment of the value of security, service of principal and interest, and above stock audit at annual intervals by external agencies appointed as per the guidelines approved by the Board would be mandatory in order to enhance the reliability on stock valuation.
Collaterals such as immovable properties charged in favour of the bank should be got valued once in three years by valuers appointed as per the guidelines approved by the Board of Directors.
Reply to the said letter to highlight your views on asset classification and divergence if any along with supporting data, papers or information for justification.
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