PRESENTED BY. Shri M.K. Aggarwal Senior Partner M.K. Aggarwal & Co. Chartered Accountants. Long Form Audit Report & Capital Adequacy. Focus of Discussion. Structured Reporting System. Assets Cash & Bank balances. Money at call and short notice Investments Advances Other Assets
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Shri M.K. Aggarwal
M.K. Aggarwal & Co.
Reporting of frauds to RBI
- Frauds involving Rs. 1 lakh and above.
- Frauds committed by unscrupulous borrowers.
- Frauds involving Rs. 100 lakh and above.
- Cases of attempted fraud.
Refer Master Circular No. –:
DBS. .FrMC. BC. No.. 1 /23.04.001/2005-06, Dt. September 9, 2005
Norms setup by the board to be considered but not exceeding
It will also include Credit exposure / investment exposure.
The scheme will not cover cases of willful default, frauds and misfeasance.
(Refer – Master Circular Dt. 3rd September, 2005)
Principles relating to management of advances should be kept in mind.
For brief understanding refer master circular of RBI sent to Urban Co-operative banks should be referred which at least should be kept in mind for commercial banks also.
Refer Master circular-:
UBD.BPD (PCB) MC. No. 5 /13.05.00/2005-06
Dt. August 11 , 2005.
Debt restructuring guidelines as laid down by the RBI in terms of Master Circular-:
DBOD. BP. BC. No. 34 / 21.04.132/ 2005-06
Dt. September 8, 2005
Refer master circular-:
RBI No. 2005-06/ 28
DBOD No. BP. BC. 11 / 21.04.048 / 2005-06
Dt. July 1, 2005.
Refer master circular-:
Dt. 7th January, 2005 & 29th July, 2005.
The norms for priority sector has been laid down by the RBI in terms of master circular no. -:
RPCD. No.Plan. BC. 21/ 04.09.01/ 2005-06
Dt. July 18, 2005
The principle laid down should be kept in mind while doing audit.
Minimum requirement of capital funds
Banks are required to maintain a minimum CRAR of 9% on an ongoing basis.
Tier II elements should belimited to a maximum of 100% of total Tier I elements for the purpose of compliance with the norms.
The elements of Tier I & Tier II capital do not include foreign currency loans granted to Indian parties.
In the case of public sector banks which have introduced Voluntary Retirement Scheme (VRS), in view of the extra-ordinary nature of the event, the VRS related Deferred Revenue Expenditure would not be reduced from Tier I capital. However, it will attract 100% risk weight for capital adequacy purpose.
Elements of Tier II capital
Based on assignment of risk weights on different assets class, computation be made on total risk weighted assets.
Risk weighted assets are comprised of credit risk assets and general market risk assets.
Compute capital ratio on the basis of regulatory capital maintained and risk-weighted assets.
Total Capital Funds 105
support credit risk (1000*9%) 90