Audit of npa account

Main purpose of Stock Audit of any loan account of Bank is to ascertain the status of security available to the Bank, whether NPA or Standard. It includes the value of Stock, quality of stock, marketability of stock, value of unpaid stock, slow moving or obsolete stock which may not fetch any considerable value. Further it is also necessary to know about the ownership of the stock held by the borrower. Sometimes stock is lying in the godown of the borrower but it may not be owned by him. Therefore, it is also necessary to ascertain the ownership of the stock by veryfying the documentary evidence. All these aspects are required to be covered in Stock Audit report

You have to mainly check the recoverability of the Principal and interest through the available stock of the concern. Usually any organisation pledge their stock in return for a CC. Therefore the physical verification of the stock as well as the value is to be ascertained which will be able to recover the damages incurred by the bank.