Cash credit account interest change

Save Share

This query is : Resolved

Divyesh Zanzrukiya (Querist)
Follow

28 December 2013 Hi all, i am doing concurrent audit of one bank while observing cash credit a/c i found that in one a/c bank has charged interest @ 14% while as per sanction interest should be charged @ 13%. what should i do? They told me that they can give retrospective effect upto 6 months only.. what will be the consequences of this? how can i calculate interest manually? So that i can report it. Please reply all at the earliest as it is of current month i have to finalise my Audit Report.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

29 December 2013 check whether the interest rate in sanction is linked to base rate. If yes, then analyse the change in base rate during the relevant period. if there is no change in the base rate, you may report that excess interest has been charged and should be accordingly reversed.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

29 December 2013 further, check the claim for retrospective amendment. And even in case if such a restriction is inbuilt in the system, they should still be able to pass manual entry to create reversals.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!