ICAI SIRC releases E‑Book with Practical Tips for Bank Branch Audits

The Southern IndiaRegional Council (SIRC) of the Institute of Chartered Accountants of India (ICAI) has published a comprehensive e-book titled “Quick Tips on Bank Branch Audits”, authored by CA. Mony Ananthasivan.

The publication mainly aims to equip chartered accountants with practical guidance and structured approaches to conducting bank and branch audits effectively.

The e-book underscores the critical role of auditors in ensuring compliance with regulatory standards and industry norms. It mainly focuses on the fact that bank audits are not merely routine checks but rigorous examinations of loan applications, Know Your Customer (KYC) compliance, financial statements, project reports, and technical reviews.

According to the foreword, statutory auditors are appointed by the Reserve Bank of India (RBI) in coordination with bank management and ICAI, stressing the importance of independence and credibility in the audit process.

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The e-book covering areas such as :

• Verification of Advances: Auditors are required to scrutinize large advances, particularly those exceeding ₹10 crore or 10% of the branch’s total advances, as mandated by the revised Long Form Audit Report (LFAR). The book details the functional areas of credit appraisal, sanctioning, documentation, mortgage creation, and recovery.
• Credit Appraisal Framework: The “Three P’s” principle—Person, Purpose, and Property is stated as the foundation of sound lending practices. Auditors are advised to examine borrowers' constitutions, credit ratings, and industry viability to identify potential risks.
• Security and Documentation: The text provides detailed guidance on verifying primary and collateral securities, ensuring enforceability of mortgages, and compliance with statutory requirements. It also stresses the importance of registering security interests with CERSAI and reporting large credits to CRILC, as mandated by RBI notifications.
• Audit Under Computerized Environments: Recognizing the digital transformation of banking, the e-book outlines methods for auditing in technology-driven systems, including system audits and revenue leakage checks.

Importantly, the publication also addresses specialized branches such as SME, foreign exchange, and asset recovery management units, urging auditors to tailor their approach to the unique business models of each. It further incorporates recent RBI circulars on prudential norms, ensuring that professionals remain updated on evolving regulatory frameworks.

CA. China Masthan Talakayala, Chairman of SIRC of ICAI, expressed gratitude to the author and reviewers, noting that the e-book provides “in-depth knowledge on Bank Branch Audit requirements right from verification of advances to NPAs and auditing under computerized environments.” He added that the resource is designed to help professionals conduct audits “in an effective and diligent way.”

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