Guidance Note on Audit of Banks (2025 Edition)
Guidance Note on Audit of Banks (2025 Edition)
The Auditing and Assurance Standards Board (AASB) of ICAI under the authority of the Council of ICAI brings out the revised edition of “Guidance Note on Audit of Banks” every year to provide detailed guidance to auditors on statutory audit of banks and bank branches.
AASB is releasing the Guidance Note on Audit of Banks (2025 Edition).
- A. Foreword and Preface of Past Years
- B. Text of Guidance Note on Audit of Banks (2025 Edition)
- C. Appendices of the Guidance Note on Audit of Banks (2025 Edition)
- D. Text of Relevant Master Circulars Issued by the RBI
- E. Text of Relevant Master Directions Issued by the RBI
- List of Relevant Master Directions Issued by the RBI
- Master Directions (Part-1 , Part-2)
- List of Relevant Master Directions Issued by the RBI
- F. Text of Relevant Notifications, FAQs and General Circulars
Introduction
1.01 The area of operation / function of the Personal Banking Department is typically confined to resource mobilization, i.e., source of funds (for the bank) in the form of CASA deposits, term deposits, customer service and operations. This Department is responsible for monitoring the deposit portion which is the major contributor for the bank as resource of funds.
1.02 In today’s new age banking, there are various innovative products which are launched by every bank which has its own unique characteristics and customisation based on the need for funds and customer portfolio of the bank.
For example, the bank may have deposit products as well as products / services linked with categorisation of customers based on predefined criteria offering privileged banking services to certain section of customers. In the era of interest rate liberalisation, every bank is expected to be proactive in terms of decision making in respect of rate of interest. Further, the banks do have specified polices w.r.t. bulk deposits and a bank may offer need-based special rates on such deposits.
1.03 Personal banking is responsible for handling the needs of retail customers. Each Bank will have its own threshold for defining who is a retail customer based on the products and services offering criteria. Banks may have assigned relationship manager for each customer based on his/her deposit placement (or any other parameters) with the bank, who is a single point of contact for all their needs of banking services, be it loans, cards, deposits, insurance and investments. This is also referred to as Wealth Management Division in some banks.
1.04 The Operations Department of a bank oversees various functions. At a broad level, the Banking Regulation Act, 1949 defines, what functions a bank can conduct. Within this overarching framework, banks conduct a variety of operations which can be centralized or decentralized which would vary from bank to bank.
1.05 Due to increased competition, customer service plays a key role, and the Operations Department has to ensure that the team does things right. Any error in operations pose a risk to the bank as a result of the loss caused to the customer or the reputational risk involved.
1.06 Banks may have adopted Citizen’s Charter/ Charter for Customer Service, which would have elaborated details of the bank’s commitment approach towards customer service.
1.07 In the recent years, in addition to the regular channel of onboarding customers, banks have commenced onboarding through multiple fintech channels and other parallel products (e.g., Fastag, credit cards, mobility cards, etc). Such customers are also required to follow UCIC guidelines.
Read More Updates on ICAI
