Bank Audit Checklist for 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 

case) 

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.