Audit checklist for Cash Credit limit

Cash Credit (CC) limit is an important product in the advanced segment of financial institutions. To do a CC limit audit we required an extensive and informative checklist. The checklist is being followed,

?A. Checklist for Pre-Sanction activity:

?·??????? CAM (It should be read thoroughly)

·??????? CMA credit monitoring arrangement

·??????? KYC of the applicant/co-applicant/guarantor

·??????? CIBIL of applicant/co-applicant/guarantor/sister concern

·??????? CRILIC report (If applicable as per RBI circular)

·??????? 3 years audited financial with ITR

·??????? Proprietorship letter/ Partnership deed/ MOA/AOA

·??????? Pre-sanction inspection report.?

·??????? Proper margin & Appropriate ROI are stipulated.?

·??????? Internal and External rating sheet of the borrower

·???????Whether any litigation is present in the name of the borrower/ applicant/co-applicant/guarantor.

?B. Checklist for Post-Sanction activity:

?·??????? Sanction letter.?

·??????? Primary security details (CERSAI/MOE/DCCD)

·??????? Legal Report and Vetting Report

·??????? Valuation Report?

·??????? All disbursement related documents

?C. Checklist for Post-Disbursement/Monitoring activity:

?·??????? Verify all covenants which are mentioned in the sanction letter ?

·??????? Post-sanction inspection report as well as whether the charges are being collected or not.

·??????? Check that stock, ? creditors ? & ? book debts statements submitted by the?borrower are in the prescribed format within the timeline as well as ensure that debtors are classified age-wise. Remember the debtor’s age, which is one of the main criteria for calculating the DP. (Drawing Power)

·??????? Is the drawing power calculated correctly or not

·??????? FFR I & II (If applicable as per RBI circular)

·??????? Check that where penal charges are collected where it is required

·??????? Legal Report

·??????? Check that whether Insurance of Stock and collateral/s is done (Amount should not be more/less)

·??????? Verified the account statement of the client and tried to identify whether the churning, endues/utilization/overdrawn of the limit is being done as per sanction condition.

·??????? Stock audit report (If applicable)

·??????? Standard and sub-standard status of the client should be verified

· The Hypothecation board is being displayed in the proper place.