RBI Policy: Bank s Policy:

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RBI Policy: 1. Customer Acceptance Policy 2. Customer Identification procedures 3. Monitoring of transactions 4. Risk Management Bank s Policy: 1. Latest Photograph 2. ID Proof (proofs to be counter verified with originals by the bank officials and state the remarks as verified from the original ) 3. Address proof (Not later than 6 months old) 4. Either PAN or Form 60/61 5. Customer information namely Name, Address, Phone, Email, DoB, Nature of employment/business, name & address of employer, source of income / wealth, financial status in compliance with Customer Identification procedures 6. Under limited or simplified KYC norms, operations are to be restricted to balance of Rs. 50,000/- and credit summation of Rs. 1,00,000/- during the year and other provisions of converting relaxed KYC account to Regular KYC account also to be ensured. 7. Account opening form is signed by the authorized official? 8. Risk classification done or not? 9. Terrorist list of individuals is referred while opening new accounts or not?? Nature of Returns Submitted: 1. Flash Report 2. Advances Sanction List 3. TOD/EOD Statement 4. B.P/B.D Statement 5. B.P/B.D Returned Unpaid Statement 6. Compliance of Audit reports like Statutory Audit, Internal Inspection, Surprise Inspection, RBI Inspection, Credit Audit, FOREX Audit or Concurrent Audit 7. TDS Return 8. Service Tax Return

KYC Norms Compliance: 1. Serial no. of last saving/current account opened in the last month 2. Serial no. of last saving/current account opened in the current month 3. Number of accounts opened in the current month 4. Whether the accounts are classified in to 3 risk categories depending on the customer identification procedures? 5. Prepare the list of accounts opened during the month and enter the risk category which the bank has classified that into 6. Prepare a separate list of accounts which are classified as other than Low risk and update it monthly and review the accounts for a period of 6 months 7. System generated list of accounts should tally with the number of accounts in the report 8. A letter to introducer and account holder is sent and check the same with entry in Outward register Advances Compliance 1. Have a master print out of nature of loans that exists in your branch 2. System generated list of accounts opened during the month 3. Sanctioning Authority and its simultaneous comparison with the Power Chart 4. Master Data print out of each advance account opened during the month and list of all documents available in respect of that account has to be written on the Master data print out page as well 5. KYC Compliance of that account as well. 6. CIBIL Score of that account 7. Date of Pre sanction visit and post sanction visit with the name of Inspecting official 8. Date of Debit of Inspection charges 9. Amount of Processing charges debited and date of debit in account 10. Rate of Interest as per Sanction letter and as per Master Data 11. Amount of Insurance premium as per Policy document and date of insurance 12. Credit Score of the party (Internal as well as External) 13. Date of Equitable Mortgage and date of entry in the register 14. Date of creation of charge or form 8 filling date with challan date as well 15. Date of receipt of stock statement and its entry in the system for each CC Account General Checklist 1. Name of the Advances Officer 2. Name of officials who keeps the keys or controls requiring dual control 3. Date of sending various reports to respective controlling authority, and list of any irregularity reported therein 4. Date of Last Customer Meeting held and list a few names of the Customers who attended the meeting from the Customer Meet Register

5. Date of latest opening of the Complaint box, Official who was present at that time and whether it has been entered into the Complaint register or not? 6. Range of Serial numbers of the securities verified is to be written. 7. Amount of Cash available at the time of ATM verification and name of officers present at the time of verification.

General checklist in case of fresh loans: 1. Proper Application Form 2. Loan Referral register 3. Proper Documentation 4. Whether documents received as per manual of the bank 5. Whether documents have been properly filled up. 6. Whether documents have been signed properly. 7. Pre Sanction Report 8. Credit Rating 9. Processing Charges 10. Inspection Charges 11. Documentation charges 12. End use of funds 13. Charge creation & Registration in case of Corporate Borrowers 14. LSR (Legal Search Report)(in case of Charge) 15. Ensure that they are sanctioned in accordance with delegated authority 16. Latest position of Insurance with Bank Clause. 17. Ensure that the name of borrower as well as guarantor are not in the Defaulters or Caution list of RBI. 18. Verify the Rate of Interest as entered in the system with the terms of sanction with which it was sanctioned. 19. Report whether documents have been verified/checked by Panel advocate (less than Rs. 1 cr.) and by Bank s Legal Manager in case the advance is for Rs. 1cr. and above, 20. Application of Interest rate as per the Credit Rating. 21. All terms of sanction are to be complied with. 22. Legal charges debited correctly(wherever applicable) 23. In case the loan is to be repaid in form of EMI, it is to be fed into the system. 24. In case of fresh CC, full amount of loan must not be debited in a single shot, reason being that there cannot be a single creditor or all purchases cannot be from a single source. 25. Valuation Report 26. Whether Document register maintained 27. Whether EMT/Title Deed register maintained & updated

In case of Old Advances: 1. Post Disbursement follow up. 2. Ensure that there are no instances indicative of diversion of funds. 3. Timely submission of Stock/Debt statement with complete break-up to give a clear picture. 4. Review of account must be done timely. 5. Non payment of Interest Installment. 6. Verify the submission of claims to DICGC and ECGC in time. 7. Regular inspection or unit visit by the branch officials as well as Concurrent auditor is to be ensured. 8. Drawing Power is to be calculated properly. 9. Revival of documents to be done at the end of 3years to ensure that the validity of documents don t expire before the loan gets repaid. 10. Insurance Register to be maintained and updated. 11. Valuation report from approved valuers for fixed assets charged to the bank, once in three years is to be obtained. Documents in case of Vehicle Loans 1. Income proof like Salary slip, IT return and financial papers 2. Employer s undertaking/pdc not obtained as applicable 3. Margin norms are complied with as applicable 4. Bank s lien to be noted with RTO as evidenced by RC 5. Insurance with Bank clause 6. Hypothecation agreement 7. Inspection of vehicle 8. Stamped receipts of payment of money 9. Blank TTO form to be obtained 10. Power of Attorney for vehicle to be obtained In case of Educational Loans 1. Proof of admission 2. Affiliation of Institution to be examined 3. Progress report to be examined 4. Ensure that Margin money is taken 5. Disbursements directly to the Institute 6. Assignment of future income for payment of installment to be obtained

7. Documents to be executed jointly by the student and the guardian 8. Undertaking to effect that borrower is not availing any loan from any bank In case of Agricultural Finance Accounts 1. Proof of Land accord 2. Charge on land is to be registered with Revenue Authority 3. Project report to be obtained 4. Insurance of livestock, crop etc. to be done Loan against FD 1. Lien should be noted in the system as well as physical deposit receipt. 2. It should be properly discharged by signing on the back on a revenue stamp. 3. In case of renewal & enhancement of FD, it has to be discharged and documents to be obtained properly In case of Housing Loans 1. Non encumbrance Certificate 2. (a) Estimate of construction (b) Approved Plan & Permission from the concerned authority to be obtained 3. Confirmation of creation of legal mortgage 4. Terms & Condition of sanction to be conveyed to borrower and acceptance to be obtained 5. Completion certificate from Municipal authorities 6. Valuation report to be obtained 7. Post disbursement and stage wise inspection to be carried out 8. (a) Bills (b) Receipts of contractor (c) Engineer s certificate 9. Insurance of House with Bank clause. 10. Registry papers of House (Original deed to be obtained) 11. Guarantor clause 12. Basis of calculating net worth of Guarantor 13. ITR for last 3 years. 14. Latest salary slip (if employed)

Vehicle Loans 1. Duplicate keys of the vehicle to be obtained. 2. RC or Temporary RC to be held. 3. Bank s name to be entered in RC. 4. Insurance with Bank clause. 5. Receipt of payment. 6. Performa invoice of the vehicle from the dealer. 7. Ensure the payment of margin money of the borrower. 8. Driving License in borrower s name. Advances against Immovable Property 1. Non encumbrance certificate to be obtained from advocate. 2. Latest tax paid receipt to be obtained. 3. EM to be created as per the terms of sanction. CC accounts 1. Ensure the end use of funds. 2. Adequate Insurance of stock. 3. Hypothecation of stock. 4. Next review period to be mentioned. Term Loans 1. Repayment period to be mentioned. 2. EMI to be fed into the system Credit Monitoring 1. End use of funds. 2. Frequent transfer to & fro from any account, if yes nature of transactions to be examined. 3. Whether there is an outflow indicating commitment of the borrower, having any financial obligation, then indicate the purpose thereof? 4. Whether the credits in the account are sufficient? 5. Whether the operations in the account indicate that the borrower will be in a position to meet out its obligations.

Points to be kept in mind while on UNIT VISIT 1. Before going for unit visit, read all the documents available with the bank and terms & conditions of sanction and check whether all the conditions are complied with. 2. Management personnel who was available at the unit. 3. Name Plate of the bank at main gate. 4. Whether the unit is working? 5. Whether the stock register is maintained & updated, if yes take a copy of the same. 6. Books of accounts updated till which date, a copy of trial balance is to be obtained. 7. Whether physical stock is APPARENTLY the same as what is appearing in the stock register. 8. Take a receiving of the stock statement and trial balance supplied by them. Register required to be maintained in case of Advances 1. Register of adhoc/temporary sanction 2. Register of suit filed accounts 3. Guarantee issued register 4. Proposal sanctioned register 5. Irregularities pointed out in previous RBI/LFAR/Inspection reports are not rectified. 6. Poor follow up of NPA/suit filed/decreed accounts. Details of fresh advances sanctioned during the month Category Name of Party Limit Sanctioned Amt Disbursement Documents obtained Some terms defined: 1. Negative Pledge: In this clause, the security is not to be sold before the permission of lender. 2. Pari Passu: Proportionate 3. DSCR: Debt Service Coverage Ratio, The degree of freedom with which he firm can pay off its liabilities in terms of debt. It must not be less than 1.2.

4. Capital Gearing Ratio: TOL/TNW and it must not be more than 3. TOL(Total Outside Liabilities) TNW(Total Net Worth) When an account can be placed in Watch Category Accounts: 1. Account shows continuous excess beyond 30days. 2. Int. debited is not served within next 30days. 3. Installments of Term Loans or Demand loans are to be served within next 30days. 4. Packing advances are outstanding beyond 30days from the expiry of corresponding LCs. 5. Bills outstanding for more than 30days beyond due date. 6. Delay in submission of stock statements/financial statements beyond 30days from due date of submission. 7. Frequent Return of Cheque for want of funds/inadequate Drawing Power. 8. Frequent return of Bills Discounted. 9. Incomplete documentation beyond 30days from date of disbursement of advance. 10. Non compliance of terms & conditions of sanction beyond 30days from date of disbursement of advance. General Points 1. Application in prescribed format 2. Pre sanction Inspection 3. Credit Rating 4. PSR reporting 5. Sanction is not recorded in prescribed format 6. Observation of KYC norms 7. Correct deduction of TDS

Management Presentation 1. We hereby certify that no fraud, irregularities or serious fraud has occurred during the current month 2. Only clean and unstapled notes are issued to the public and accepted as well 3. No writing is done on the watermark portion of the notes. 4. Staples, Adhesives are not used to secure notes 5. We certify that we do exchange the soiled and mutilated notes when customer asks for the same 6. We accept Ashoka Pillar notes but do not issue them to public, instead remit them to RBI 7. We stamp on the forged notes and impound the same, issue a receipt to the Customer and then lodge a FIR with simultaneous forwarding to the nearest Police station. We also send a report in this regard to the Forged Notes Vigilance Cell along with a copy of the FIR. 8. We have the Ultra Violate Machine for detection of fake notes and this is used for detection as well. 9. We have correctly collected service tax on various customer services and transferred the same to G/L Service Tax payable