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Audit Presentation
Flow of Data:
Finacle
ASCROM
Features:
Finacle
Revenue Recognition Operations
ASCROM
Asset Classification Provisioning
CLORET
Financial Statements
ASCROM:
1. Operations and drawing powers are captured from the finacle. All other fields in the master are manually feeded. Like value of security, repayment schedules, etc. It has to be checked properly. 2. Branch auditors are advised to check the audit trail of ASCROM to identify the changes made by the branches in master.
ASCROM:
3. Auditors should also verify whether restructuring codes (71/72/74/92) are marked in ASCROM. 4. Incase of Advance Bill (LC Devolvement) and Bill Past Due (Guarantee Invocation) devolvement and invocation dates and outstanding are not flowing from finacle. It has to be punched manually. Correctness of date to be checked at branch level. 5. If Interest to be serviced field in ASCROM is left blank/No, system will not capture the interest portion debited to the loan accounts as overdue, even though it is not serviced by the borrower. Field can be checked by the auditors.
ASCROM
6. All the fraud accounts need to be marked under special category code 87. 7. External credit rating wherever necessary to be updated in ASCROM for correct risk weightage for capital adequacy.
IRAC Norms:
1. If debits arising out of devolvement of LC or invoked guarantees are parked in a separate account, the balance outstanding in that account also should be treated as a part of the borrowers principal operating account for the purpose of application of prudential norms on income recognition, asset classification and provisioning. (para 4.2.7.ii of IRAC norms of RBI) 2. Provision Requirement: Sub-standard: Secured 15%, Unsecured 25% However Bank is making the provision of 20% on secured advances.
Restructuring Guidelines:
1. Mere extension of DCCO will also be treated as restructuring. ( para 4.2.15.3.(v) (4.2.15.4.(iv)). Branch auditors are advised to check the necessary marking of special code in ASCROM and verify and tally with the certificate for restructured Assets with that of ASCROM. 2. A loan for an infrastructure project and Non Infrastructure projects will be classified as NPA if it fails to commence commercial operations within two years(Infrastructure) and six month (non infrastructure) from the original DCCO, even if it is regular as per record of recovery. (para 4.2.15.3.(ii) & 4.2.15.4.(ii)). 3. Bank cannot reschedule/restructure/renegotiate borrowal accounts with retrospective effect. While a restructuring proposal is under consideration, the usual asset classification norms would continue to apply. (para 11.1.2).
Restructuring Guidelines:
4. All restructured accounts which have been classified as non-performing assets upon restructuring, would be eligible for up-gradation to the standard category after observation of satisfactory performance during the specified period. (i.e specified period means a period of one year from the date when the first payment of interest or installment of principal falls due under the terms of restructuring package). (para 11.2.3). 5. In case of restructured asset, which is a standard asset on restructuring, is subjected to restructuring on a subsequent occasion, it should be classified as substandard. (para 11.2.6).
Restructuring Guidelines:
Recent RBI circular on CDR guidelines on Second Restructuring/ Re-work out: (DBOD.No.BP.11730/21.04.132/2012-13 dated 18.02.2013)
All the cases of reschedulement/ rephasement during the concession period of a first time restructured account should be treated as repeated restructuring and should be classified as NPA.
Closing Returns:
Closing Return no.1- Balance Sheet. Closing Return no.2 Profit & Loss Account.
Closing Returns:
Closing Return no.7- Return on outstanding balances and doubtful amount in accounts other than Advances and Suspense.
Closing Return no.11- Statement of Bad & Doubtful Debts written off during the period (Annual)
Closing Return no.13- Return on Capital Adequacy (System generated)
Closing Returns:
Closing Return no.14- Memorandum of Changes (Balance Sheet & P&L) Closing Return no. 14D For change in Classification of Advances Closing Return no.15 to 18- Return on classification of Advances (Std., Sub-std, Doubtful & Loss) Closing Return no.19- Master summary of Advances. Closing Return no.20- Sectoral classification of Advances. Closing Return no-21 Statement of outstanding Deposit & Advances at Rural Branches (Annual)
***Thank You***