Group 14: Bank Audit

Correct answer A: This Direction scope excludes small-finance banks; verify the appropriate bank-type rules instead of importing it automatically.

The current Direction paragraph 3 defines eligible commercial banks and excludes small-finance/payment/local-area banks; exclusion from this text is not absence of regulation.

Correct answer D: That a reviewer signature alone proves the exceptions were corrected.

Module control review concerns performance and exception resolution; a signature is not the same as correction.

Correct answer A: Information understandable enough to assess the changing bank risk profile, not just punctual delivery.

Module risk-management information needs reliability, timely consistency and understandable changing-risk information.

Correct answer B: Rs 420 lakh:Rs 300 stock DP plus Rs 120 debtor DP.

(500-100)x.75=300;200 x.60=120;total 420. Margins/eligibility are exercise assumptions, not universal regulatory percentages.

Correct answer B: No; inspect the invocation and resulting funded/accounting exposure, rather than rely on the original facility label.

The module funded/non-funded distinction depends on actual transfer/event status; currentRBI 35 also prevents hiding invoked-guarantee debits separately.

Correct answer B: Include that relevant account-specific report and corroborate the current defect/resolution.

Module other-report review includes manager charge-handover and security/account reports; use as leads with independent evidence.

Correct answer D: No; equality is enough to cover the supplied interest, so that particular shortfall criterion is absent.

Paragraph 5(7)(iii) asks credits not enough to cover interest; with equality and no other supplied triggers, this criterion is absent.

Correct answer A: Only the 91 day loan meets the more-than 90 day criterion.

Current RBI 42(1) uses more than 90 days for term loans, not the inclusive OD-definition alternatives.

Correct answer C: The continuous excess-limit/DP criterion independently applies.

Paragraph 5(7)(i) is an alternative condition; credits do not remove a still-continuous excess fact.

Correct answer C: Ongoing classification with day-end status updates and actual classification-date reporting.

Current RBI 37 addresses ongoing downgrade/upgrade and day-end status with reportable actual dates.

Correct answer B: Keep business logic/parameters/configuration updated for ongoing regulatory compliance.

Current RBI 39(2) requires ongoing compliance; input/configuration evidence matters beyond a functioning screen.

Correct answer D: Seek supported evidence of the manner of regularisation rather than accept the standard label alone.

Current RBI 47-49 distinguishes care, inherent weakness and genuine regularisation evidence; neither automatic cure nor automatic fraud is justified.

Correct answer C: Classify the outstanding discounted bills NPA from when the other facilities were classified, under the stated failure conditions.

Paragraph 51 limits the 50 LC treatment when the supplied document/payment/borrower conditions fail.

Correct answer C: Borrower-wise treatment for the direct outside-arrangement facilities, not automatic use of the specific on-lending exception.

Current RBI 54(2) expressly distinguishes direct member loans outside on-lending from 54(1) specific facilities.

Correct answer D: Apply asset classification/provision norms; State backing is not the Central Government exception.

Current RBI 58(3) uses more-than 90 day overdue for State-guaranteed advances/investments;58(1) has the distinct Central rule.

Correct answer A: No; adequate margin is a condition requiring evidence.

Current RBI 55(1) includes the listed types subject to adequate margin, not a label-only exemption.

Correct answer A: No; exactly 50 percent is not less than 50 percent, though other facts/criteria still need assessment.

100/200=50 percent; current 68(1) says less than 50 percent, not 50 percent or less.

Correct answer C: 7.5 percent is below 10 percent; ignore security and apply the stated direct loss treatment.

9/120=7.5 percent;68(2) denominator is borrowal outstanding and requires less than 10 percent.

Correct answer D: Ordinary upgrade to standard after verifying the entire cross-facility arrears cure.

The supplied complete genuine cure satisfies the ordinary 69/71 condition, unlike token/partial repayment.

Correct answer D: Rs 12 lakh:required Rs 30 lakh at 25 percent less Rs 18 recorded.

Current 86 adds 10 percentage points to 85 base 15 percent;120 x.25=30 and 30-18=12.

Correct answer B: Rs 55 lakh:Rs 40 uncovered at 100 percent plus Rs 15 secured at 25 percent.

Current 90-91:uncovered 100-60=40;secured 60 x.25=15;total 55 for up-to-one-year doubtful.

Correct answer C: 20 percent, or Rs 10 lakh, on the supplied qualifying safeguards.

Current 87 is the conditional lower 20 percent rate;50 x.20=10. It is not available from an infrastructure label alone.

Correct answer D: The definition excludes intangible guarantees/comfort letters; assess actual tangible security and ab-initio conditions.

Current 5(10)/(13) defines tangible properly charged security and unsecured exposure; do not confuse guarantees with tangible security.

Correct answer B: Verify actual write-off and residual balance;95 full provision concerns loss assets retained in books, not an invented retained amount.

Current 94 requires write-off;95 requires 100 percent if retained. Accurate status/balance evidence prevents double-counting fiction.

Correct answer A: Accrual over the period covered by the renegotiated/rescheduled extension, not automatically all upfront.

Current 127 specifies period-based accrual for these fees/commissions; other actual facts require their relevant rules.

Correct answer B: That specified capitalised moratorium interest need not be reversed; do not extend this to every uncollected fee or unrelated interest.

Current 129 is specifically scoped;128/130 still govern other applicable unrealised income.

Correct answer C: The absent-agreement fallback is not a licence to disregard an existing clear agreement.

Current 136 specifies uniform/consistent accounting principle where agreement is absent; actual agreed terms/source evidence still matter.

Correct answer A: The correction is proposed, not verified posted; recheck final figures and reporting implications.

ICAIguide 25.35 separates appropriate MOC, final numbers and main/LFAR reporting. Actual posting and final evidence must be confirmed.

Correct answer C: Rs 7.5 lakh, with ongoing accrual cessation and actual cash-basis assessment separately.

Current 128/130 address both supplied unrealised past amounts;6+1.5=7.5.

Correct answer D: Do not recognise the funded Rs 2 lakh on that basis; the genuine Rs 1 lakh may qualify subject to supported appropriation/source facts.

Current 135 excludes interest credits from fresh/additional borrower credit; source/appropriation verification is needed.