The Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India (ICAI) has issued an Exposure Draft of Guidance Note on Audit of Banks for comments from the stakeholders.
The area of operation / function of the Personal Banking Department is typically confined to the resource mobilization, i.e., source of funds (for the bank) in the form of CASA Deposits, Term deposits and customer service and operations. This department is responsible for monitoring the deposit portion which is major contributor for the bank as resource of funds.
In today’s new age banking, there are various innovative products which are launched by every bank which has its own unique characteristics and customisation based on the need for funds and customer portfolio of the bank. For example, the bank may have deposit products as well as products / services linked with categorisation of customers based on predefined criteria offering privileged banking services to certain section of customers. In the era of liberalisation of rate of interest, every bank is expected to be proactive in terms of decision making for rate of interest. Further, the banks do have specified polices w.r.t. bulk deposits and a bank may offer need-based special rates on such deposits.
Personal Banking is responsible for handling needs of retail customers. Each Bank will have its own threshold for defining who is a retail customer based on the products and services offering criteria. The banks may have assigned relationship manager for each customer based on their deposit placement (or any other parameters) with the Bank, who are a single point of contact for all their needs of banking services be it loans, cards, deposits, insurance & other investments. This is also referred to as Wealth Management division in some banks. This is also covered in Chapter 3 “Financial Services provided by Banks” of Section A of the Exposure Draft of Guidance Note on Audit of Banks (2023 Edition).
Operations department of a Bank oversees various functions. At a broad level the Banking Regulation Act defines, what functions a bank can conduct. Within this overarching framework, banks conduct a variety of operations which can be centralized or decentralized which would vary from bank to bank.
The last date for comments is February 12, 2023. “Your comments on this Exposure Draft should reach us by February 12, 2023. Comments are most helpful if they indicate the specific paragraph(s) to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording,” the ICAI said.
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