1. Bank Audit through CBS CA. Kiran Kunte B. Com, FCA, DISA, Cert. IFRS, LL.B CA. Kiran Kunte B. Com, FCA, DISA, Cert. IFRS, LL.B

2. Theme: Audit objectives do not change … Methodology does … Audit objectives do not change … Methodology does …

3. Background: Sec. 143 (9) of Companies Act 2013: AUDITING STANDARDS Sec. 143 (9) of Companies Act 2013: AUDITING STANDARDS Sec. 143(12) of Companies Act - 2013: FRAUD Sec. 143(12) of Companies Act - 2013: FRAUD SA 315 OF ICAI: Risk Assessment SA 315 OF ICAI: Risk Assessment SA 240 OF ICAI: CIS Environment SA 240 OF ICAI: CIS Environment Amendment to Sec. 194 A of Income Tax Act - Union Budget 2015 Amendment to Sec. 194 A of Income Tax Act - Union Budget 2015

4. CORE BANKING SOLUTION CORE means … CORE means … Technical Definition Technical Definition BOD / EOD BOD / EOD SOL, Data Centre, DR Site SOL, Data Centre, DR Site

5. Practical Difficulties: Auditing with Computer  Auditing with Computer  Not possible, CAAT Not possible, CAAT Auditing AROUND the Computer Auditing AROUND the Computer

6. CBS ENVIRONMENT 01-SINGLE CENTRAL DATA BASE: FINACLE 01-SINGLE CENTRAL DATA BASE: FINACLE 02-BRANCH SERVER + CENTRAL DATA BASE: TCS 02-BRANCH SERVER + CENTRAL DATA BASE: TCS 03-BRANCHES GROUPED IN CLUSTERS & CLUSTERS ARE ATTACHED TO SERVER 03-BRANCHES GROUPED IN CLUSTERS & CLUSTERS ARE ATTACHED TO SERVER

7. Payments / Settlements: RTGS RTGS NEFT NEFT SWIFT SWIFT NPCI NPCI SFMS SFMS

8. Myths about CBS: Requires software knowledge in detail Requires software knowledge in detail No data can be made available in the branch, except disclosed by the branch ‘suo moto’. No data can be made available in the branch, except disclosed by the branch ‘suo moto’.

9. LFAR: Level of computerisation Level of computerisation Whether advances against Lien of deposits have been properly granted and Lien has been ‘marked’? Whether advances against Lien of deposits have been properly granted and Lien has been ‘marked’? Are there any ‘overdue’ deposits? Are there any ‘overdue’ deposits? Whether the branch has a system to compute discrepancies in interest and timely adjustment thereof? Whether the branch has a system to compute discrepancies in interest and timely adjustment thereof? Suspense account / Sundry assets Suspense account / Sundry assets

10. CBS Products: FINACLE and BANC

11. Some banks using FINACLE

12. CBS Products: FINACLE and BANC Some banks using FINACLE

13. CBS Products: FINACLE and BANC Some banks using BANC

14. CBS Products: FINACLE and BANC Some banks using BANC

15. Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out) Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out)

16. Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out) Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out)  Sanctioned limit  Sanctioned limit  Margin %  Margin %  DP Mode  DP Mode  Stock statement frequency  Stock statement frequency  Trigger for slippage  Trigger for slippage  Interest Rate  Interest Rate Continued … Continued …

17. Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out) Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out)  Linkage of interest rate to credit rating  Linkage of interest rate to credit rating  Linkage to BPLR  Linkage to BPLR  Credit rating  Credit rating  Incremental rate  Incremental rate  Penalty parameters  Penalty parameters  Security code  Security code Continued … Continued …

18. Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out) Parameters as a tool of input control: e.g. Cash Credit (garbage in - garbage out)  Sector code  Sector code  Scheme code  Scheme code  CGTSME Flag  CGTSME Flag

19. Parameters as a tool of input control: e.g. Housing Loan Parameters as a tool of input control: e.g. Housing Loan

20. Parameters as a tool of input control: e.g. Housing Loan Parameters as a tool of input control: e.g. Housing Loan  Male / Female  Male / Female  Basis of Rate  Basis of Rate  Moratorium Period  Moratorium Period

21. Parameters as a tool of input control: e.g. Fixed Deposit Parameters as a tool of input control: e.g. Fixed Deposit

22. Parameters as a tool of input control: e.g. Fixed Deposit Parameters as a tool of input control: e.g. Fixed Deposit  Auto Renewal Flag  Auto Renewal Flag  TDS Flag  TDS Flag

23. Some useful features of Finacle are … Some useful features of Finacle are …

24. MenusUTILITY ACLIAccount ledger Inquiry ACMMASTER Parameters ACLHMAccount Limit History maintenance INTTMInterest Table master maintenance

25. MenusUTILITY ACTIAccount turnover Inquiry ATORAccount turnover report AINTRPTInterest report for the account SRMSecurity Register maintenance

26. MenusUTILITY ALMAccount Lien maintenance GIGuarantee enquiry BI Discounted bills Purchased bills ISRAInventory status report activity

27. MenusUTILITY IOT Inquiry on transactions. Sundry assets/Suspense/ TDSIPTDS Enquiry report INTFLRRPTInterest failure report

28. MenusUTILITY EXCRPT Exceptional Transactions Report CTRL + E You can view the second effect of transaction CTR + DPage down

29. MenusUTILITY F3Back to original CUMMCustomer master ACINTInterest calculation ACTODM Account Temporary Overdraft maintenance

30. MenusUTILITY LTL Limit tree look up. Report on limit utilisation BRCR Balancing report on bills sent for collection DCQRY Report on LC and other documentary credits DCREGDocumentary credit register

31. MenusUTILITY AFI Audit file inquiry.To see changes in data base for non financial transactions like change of status of a/c from Dormant to active

32. BANC by TCS  BGL and CGL  BGL and CGL  VPIS: Valuable Paper Instrument System  VPIS: Valuable Paper Instrument System  BGL > Inquire > Account > Account No. > Transaction Enquiry > Search by Client > Search by CIF > Search by Name  BGL > Inquire > Account > Account No. > Transaction Enquiry > Search by Client > Search by CIF > Search by Name  Exim Module Exceptional Transactions Report  Exim Module Exceptional Transactions Report

33. Cases  Migrated Accounts  Migrated Accounts  Current Accounts opened as accounts with OD  Current Accounts opened as accounts with OD  Same Borrower - Multiple Id  Same Borrower - Multiple Id  Same Depositor - Multiple Id  Same Depositor - Multiple Id  BPLR  BPLR

34. Interaction Please feel free to share your views.

35. My sincerest thanks to you for sparing your time … My sincerest thanks to you for sparing your time …