My Bank Audit experience | Revenue bank audit experience

Summary

In this video, the speaker shares their experience with their first bank audit, specifically a revenue audit. They explain the process of auditing various bank branches in Jammu and Kashmir, focusing on checking revenue recognition and ensuring compliance with RBI guidelines. The audit uncovered several issues, including the failure to update interest rates in the bank’s software and uncollected fees. Despite initial doubts about the smaller branches, the audit team identified significant errors and impressed the bank manager. The speaker wraps up by encouraging viewers to share feedback and likes, with a promise to make more such videos based on viewer requests.

Takeaways

• 😀 The speaker shares their first experience of a bank revenue audit.
• 😀 Revenue audits involve checking if a bank's revenue is correctly recognized as per guidelines from the bank's head office and regulatory bodies like RBI.
• 😀 The audit took place across seven bank branches in Jammu & Kashmir.
• 😀 The speaker highlights the importance of understanding financial software used in banks during audits.
• 😀 Initial branches did not reveal much information, but the audit team gained insights as they moved forward.
• 😀 The audit team found that one branch had not updated its interest rates in its software, affecting its revenue.
• 😀 There were observations of uncollected charges at a branch, such as civil charges, which were supposed to be levied on customers.
• 😀 Despite initial doubts, the audit team found significant issues in a smaller branch with only two loans issued.
• 😀 Bank managers were impressed with the audit team's findings and inquired about their salary, showing appreciation for their thorough work.
• 😀 There were concerns about security when moving to a branch in a riskier location, but the team chose not to proceed further after consulting their principal.
• 😀 After completing the audit, the team prepared a report and submitted it with detailed observations for further action.

Q & A

What is a revenue audit in a bank?

A revenue audit in a bank involves verifying that the bank's revenue is being recognized correctly, following the guidelines set by the bank's head office, and ensuring it complies with RBI regulations.

What were the main challenges faced during the bank audit?

The main challenges included dealing with branches that were not updating loan interest rates correctly, discovering discrepancies in fees not being charged, and working in small or remote branches where security and environmental conditions were not ideal.

What is the role of RBI in a bank's revenue audit?

RBI sets the guidelines for the bank's revenue recognition, including defining interest rates and other financial parameters that the bank must follow, which is then passed down to individual branches.

Why was the third branch particularly problematic during the audit?

The third branch was small, with only two loans issued, and the interest rate for these loans was not being updated in their software, despite changes made by the RBI. This led to revenue loss for the branch.

How did the audit team discover the issue with the interest rates?

The issue was found when the audit team realized that the bank's software was not reflecting changes in the interest rates defined by the RBI, causing revenue discrepancies.

What are the key steps involved in conducting a revenue audit at a bank?

Key steps include reviewing the bank’s guidelines, checking the software for correct revenue recognition, inspecting the interest rates and fees applied, and verifying that the bank is following the proper financial protocols as set by the RBI.

How did the audit team handle the security concerns at one of the branches?

The team was advised by the bank staff not to proceed to the branch due to security concerns in the area. They informed their principal, who gave approval to stop at that branch and focus on the others.

What lesson was learned from the audit of smaller branches?

The lesson was that even smaller branches with fewer loans may have significant errors that go unnoticed. In this case, the audit team found more issues at a small branch than expected.

What was the response from the branch manager when the audit team reported their findings?

The branch manager was impressed by the team's findings and asked about their salaries, as they were surprised by how much the audit team could uncover in such a small branch.

How did the audit team finalize their report after completing the audit?

After completing the audit, the team compiled all their observations, prepared a formal report, and submitted it as part of their revenue audit process.