Bank Audit Checklist for Cash Credit ~ 36 important points including Sanction letter, Check that drawing power is calculated correctly,Search report ,Pre-sanction inspection report. ..
Checklist for Bank Audit ~ Cash Credit
1. Sanction letter.
2. Borrower & Guarantors' profile with Photographs, ID & Address proof copy.
3. PAN Card copy of borrower & guarantors.
4. CIBIL of borrower & guarantors.
5. Documents should be self attested & verified with original.
6. 3 years ITR of borrower & guarantors.
7. Proprietorship letter/ Partnership deed/ MOA/AOA (as the case may be)
8. Financial Statements of the firm/business/company
9. Proper margin & Appropriate ROI is stipulated.
10. Pre-sanction inspection report.
11. Post-sanction inspection report.
12. Primary security details
13. Check that stock, creditors & book debts statements submitted by the
borrower is in prescribed format.
14. Ensure that Debtors are classified age-wise & only below 90 days (in most
cases) debtors are allowed for DP purpose.
15. Check that drawing power is calculated correctly.
16. CA certified debtors statements/QIS are obtained quarterly/half yearly (as the
17. Verify Stock, Creditors & Book Debts statements from financial statements.
18. Hypothecation agreement of stock
19. Ensure that stock/book debts statements are submitted timely by the
borrower. Otherwise charge penal interest on daily o/s balance.
20. Collateral security details
21. Valuation Report (not more than 3 years old)
22. Legal Opinion
23. Search report
24. Creation of EM
25. CERSAI of collateral securities
26. Check that primary security (stock) & collateral security (buildings etc) is
adequately insured with bank clause.
27. Check that inspections are carried out at periodic intervals & inspection report
is on record.
28. PPC, Documentation charges & Inspection charges.
29. Annual Review Charges are taken, even if review is due.
30. Extension of limit permitted is as per the guidelines.
31. Check that party is utilizing the limit. (otherwise commitment charges)
32. Turnover in the account.
33. Position of stock audit. (If applicable)
34. If account is running overlimit for more than 90 days, ensure that account is
treated as NPA.
35. If review due / stock statements not submitted by the borrower for more than
180 days, ensure that account is treated as NPA.
36. Other sanction terms as stated in sanction letter.