1. 1 Guidance Note on Bank Gaurav Dhamija

2. 2 Index S. No.ContentsPage No. 1. Objective 4 - 5 2. Authorized Signatories 6 - 8 3. Vouching 9 - 10 4. Control over Cheque Books 11 - 12 5. Bank Reconciliation Statement 13 - 15 6. Bank Interest & Fund Utilization 16 - 18 Gaurav Dhamija

3. 3 Index S. No.ContentsPage No. 7. Bank Guarantee & Letter of Credit 19 - 20 8. Packing Credit / Bill Discounted / Margin Money 21 - 23 9. Control over Fixed Deposits 24 - 26 Gaurav Dhamija

4. 4 1.Objective Ensure All systems & procedures for making the transactions with the bank are being adhered to. Optimum Utilization & control of funds lying in bank Gaurav Dhamija

5. 5 Objective Summary How much value addition we can contribute to assure the management that the system is full proof with remote possibility of leakages and frauds. Gaurav Dhamija

6. 6 2.Authorized Signatories Obtain the list of authorized signatories along with financial limits. Ensure list is approved by higher authority and same has been updated at periodic intervals. Gaurav Dhamija

7. 7 Take the list of all bank accounts with their - Nature and Limits - Rate of interest In case any new bank account has been opened / any bank account has been closed, check the board resolution authorizing the same. And ensure that closed bank accounts cheque books have been surrendered. Gaurav Dhamija

8. 8 Ensure, in case an Authorized signatory has left the organization, that his name has been deleted and proper information has been given to Bank. Gaurav Dhamija

9. 9 3.Vouching Ensure All payments are authorized and are within the authorization limits. All payments are duly supported and marked “PAID” along with cheque no. and date. Gaurav Dhamija

10. 10 Cancelled Cheques are marked “CANCELLED” and retained along with the voucher. Gaurav Dhamija

11. 11 4.Control over Cheque Books Ensure All the cheque books are kept in safe custody. Proper control is maintained for all receipt and issue of cheque books. Gaurav Dhamija

12. 12 On all cheques “A/c Payee” stamp has been affixed. Blank cheques are not signed. Gaurav Dhamija

13. 13 5.Bank Reconciliation Statement Ensure Bank Reconciliation Statement is prepared for all banks on monthly basis. Balance shown in Bank Reconciliation Statement is tallied with the balance as per books. Gaurav Dhamija

14. 14 Original Bank Statement is available in all cases. Entries from bank statement to bank book [names] especially contra entries and cash withdrawl and deposit entries. Cheques issued/ cheques issued but not yet presented for payment against which 6 months has been passed has been reversed/ transferred to Stale cheques Gaurav Dhamija

15. 15 account. No entries are outstanding in Bank Reconciliation Statement for more than 2 months. Person, doing Bank Reconciliation should not make Cheque. And signatures are taken on Bank Reconciliation Statement. Bank certificate is taken for closing balance at end of financial year for all bank accounts. Gaurav Dhamija

16. 16 6.Bank Interest & Fund Utilization Obtain List of all bank accounts and ensure whether there are any idle balances lying in bank accounts. List of limits available in all banks and ensure the utilization there of. Gaurav Dhamija

17. 17 Ensure that procedure of quickest crediting of realization / receipts into company Cash Credit account where interest is being borne on daily balances. The list of bank charges and Bill / Hundi. And ensure that whether they were properly charged in Bill Discounting, Demand Drafts, Bank Guarantee,letter of credit etc. Gaurav Dhamija

18. 18 List of interest rate on - Cash Credit, - Working Capital Demand Loan, - Term loan and other loan And ensure that interest is being borne by the company according to agreement / standard norms. [Obtain and file sanction letters of all banks along with date of sanction] Gaurav Dhamija

19. 19 7. Bank Guarantee & Letter of Credit Ensure Obtain the detail of Bank guarantees given by the company. All guarantees are within the validity period and were given only against requirement. Gaurav Dhamija

20. 20 Expired bank guarantees have been taken back. Letter of Credit were opened only as per requirement and ensure that all terms and conditions were taken care of. The utilization of Letter of Credit along with the amount for which it was taken should be analyzed. And Scrutinize the Letter of Credit amendment charges paid by the company. Gaurav Dhamija

21. 21 8. Packing Credit / Bill Discounting / Margin Money Ensure No Pendency. Periodicity of realization of Bill by the bank with due dates. Gaurav Dhamija

22. 22 Analyze the Overdue Interest charged by bank on late realization of Bills and reason for non-charging of same from the customers. Promptness in discounting of Bills. Analysis can be made from date of Bill of Lading. Gaurav Dhamija

23. 23 System of crediting and control over Post dated Cheques issued by the division. Same should be credited on date of payment only. Gaurav Dhamija

24. 24 9. Control over Fixed Deposits Ensure All Fixed Deposits are valid and in possession of the division and is in name of the company except where same is given as security. Calculation of Interest is correct Provision has been taken on quarterly basis. Gaurav Dhamija

25. 25 Control register of Fixed Deposits is being maintained & updated on regular basis. Fixed Deposits are made to utilize the excess funds and analyze the cost paid in Interest in Cash Credit account and Bill discounting Account in comparison to interest received on Fixed Deposit. Gaurav Dhamija

26. 26 System of collection of Outstation Cheques along with charges charged by Bank. Fast Collection scheme offered by various banks have been availed by the division. Transfer of Funds into bank account are within time. Gaurav Dhamija