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Mr. Hemant ParabChartered Accountant
1st April 2017
SHANBHAG & PARAB ASSOC. CA's 1
CBS
It is the process of providing a centralized on line system where all the data related to transactions, customer data are stored and are available to all networked branches for access.
The information technology & Communication technology are merged to suit core needs of banking is known as core banking solution.
It is common IT solution , a central shared database support the entire banking application
SHANBHAG & PARAB ASSOC. CA's 2
SHANBHAG & PARAB ASSOC. CA's 3
CenterServer (Data)
Mobile & Phone
Banking
Bank Branch
ATM ,Debit &Credit
Card
Internet Banking
Major types of CBS Program
Finacle
(Infosys)
BaNCs 24 (TCS)
FlexCube(Oracle Corp)
C-Edge(SBI & TCS)
SHANBHAG & PARAB ASSOC. CA's 4
SHANBHAG & PARAB ASSOC. CA's 5
Bank of India (BOI) Dena Bank
Bank of Baroda ( BOB) Oriental bank of Commerce
Indian Overseas Bank (IOB) Andhra Bank
Punjab National Bank (PNB) IndusInd Bank
UCO Bank Axis Bank
IDBI Bank Federal Bank
Vijaya bank ICICI Bank
United Bank of India Kotak Mahindra Bank
Union Bank of India ING Vysya Bank
SHANBHAG & PARAB ASSOC. CA's 6
B) BaNCs 24 (TCS) C) FLEXCUBE (Oracle)
SBI & Associates Banks Syndicate bank
Central Bank Canara Bank
Bank of Maharashtra Yes Bank
Allahabad Bank HDFC Bank
Indian Bank Lakshmi Vilas Bank
D) C- Edge ( SBI &TCS)
Small Rural Bank &
Cooperative Bank
Data Centre
CBS application software ( Finacle /BaNCs 24)
Hardware at Branches & Data center
Network connectivity
Availability of Power continuty
Delivery Channels ( Broadband MTNL, Hathway,
Lease Line)
Disaster recovery site
SHANBHAG & PARAB ASSOC. CA's 7
All data processing
Beginning of the Day (BOD)
Storage, back up operation
MIS report generation
Inter branch account reconciliation
Preparation of B/S ,PL and Trail Balance and
Annual results
Interest application & Other charges
e.g . Folio charges, Minimum balance charges etc.
SHANBHAG & PARAB ASSOC. CA's 8
Manual Check & Control Transaction input and Authorisation Completion of Branch Operation End of the Day (EOD) Verification of Document & Securities Inspection of stock &Book Debts Inspection of Assets & Security Pledge of NSC/KVP/Gold Jewelry Lien of FD & Mortgage of Property KYC Checks Monitoring operation of A/c. End utilisation of fund Classification of Advance as per RBI norms Discretionary Power of Operation -
TOD , Waiver etc.
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SHANBHAG & PARAB ASSOC. CA's 10
Threat and risk (Challenge)
(A) Non availability of continuous power
(B) Net work connectivity, low capacity etc
Auditor Roll under CBS : Risk assessment & Control
(A) Audit risk is acceptable at low level
(B) Procedure of Data transmitted is correct & complete
(C) Various control exist between on line and off line records
SHANBHAG & PARAB ASSOC. CA's 11
SHANBHAG & PARAB ASSOC. CA's 12
Confidentiality:
Information is shared with authorized personnel
( Maker and checker concept)
Integrity:
Information is authentic ,accurate and complete
Availability:
Systems responsible for delivering , storing and
processing information
Maker checker concept always in used
No unauthorized person allowed to record the transaction
Only authorized person allowed to modified/amend master data ,under duel control
No operation on Holiday at Branch
Operation error reported and procedure of rectification
Dummy accounts balance should be NIL
Exceptional report must be generated and to be verify
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Restriction in server room
Ensure floppy/Pen drive access not allowed on
nodes (except for RTGS)
Internet access should be separate from CBS
machines
Maintain Hardware access Register
ATM Cards & Passwords Pin envelopes are
stored in secured area under duals control
SHANBHAG & PARAB ASSOC. CA's 14
Power back up
Maintenance of down time Register
Machine break down register
Insurance /AMC of Machinery &
Equipment
Fire Extinguisher installed and active
SHANBHAG & PARAB ASSOC. CA's 15
Password management & History
Check active user IDs and guest IDs
Deactivation of User ID –where user
transfer to other branch – Staff, auditor
Special emphasis on unsuccessful login
attempts
SHANBHAG & PARAB ASSOC. CA's 16
SR.N
O. NAME OF THE REPORT FINACLE BANCS 24
1 Abnormal Transaction Inquires ATIDEPOST/ CC / OD & DL/ TL Account & Services ---
Enquiry --- Transaction
2 Account TOD Inquiry ACTODI TOD Report
3 Exception Report EXCPRPT Report Server ---- Exceptional Report
4 Insurance Expired INSEXPD Report Server---Expired Insurance Report
5 Accounts Interest report AINTRPT
Report Server ----CC/ OD & Loan Balance File Or
Product Sheet to be requested from Data centre (If
not available through product name.)
6 Loan sanction Limit Reivew LARORCC /OD & DL/ TL Accounts & Services --- Enquiry -
---Short/ Long Enquiry
7
List of Pending & Dishonored
Bills FBPADB Report Server --- MIS Report/ Trade Module
8 Loan Interest Detail Inquiry AITINQCC / OD/ DL/ TL Accounts & Services ---- Interest
Rate History
9 Loan Overdue Details LOANODUECC / OD/ DL/ TL Accounts & Services --- Enquiry ---
- Long Enquiry / Short Enquiry
SHANBHAG & PARAB ASSOC. CA's 17
SR.NO.NAME OF THE REPORT FINACLE BANCS 24
10 Loan Overdue Position Inquiry LAOPI
CC / OD/ DL/ TL Accounts & Services ---
Enquiry ---- Long Enquiry / Short Enquiry
11 Loan Document expiry dates INQLAC
DL / TL Accounts & Services --- Security ---
- Customer --- Amend/ Enquiry
12 PCFC Balancing Report PCFCBAL
Report Server --- MIS Report / Trade
Module
13 Pending Installment List PLIST
CC / OD & DL/ TL Accounts & Services ---
Enquiry ---- Accounts
14 Rate List History Query RTHQRY
CC / OD/ DL/ TL Accounts & Services ----
Interest Rate History
15
Report for Matured OD/FD
Accounts ODFDREP
Report Server --- MIS Report --- Security
Matured Report
16 TDS Inquiry & Printing TDSIP
Through offline monthly repost on Account
wise/ Transaction wise tax deduction
17 Transaction Exceptions Inquiry TEI
CC / OD & DL/ TL Accounts & Services ---
Enquiry ----Transaction
18
Guarantee Expired but not
Reversed GENR
Reports Server---- Trade Module----
Guarantee Expired Report
19 Overdue Foreign Bills ODFB Report Server --- Trade Module
SHANBHAG & PARAB ASSOC. CA's 18
SHANBHAG & PARAB ASSOC. CA's 19
SOL ID – Service out Let ID i.e. Branch code
Set ID – Branch back office No. Branch who
initiated the transaction
Transaction ID , Journal No.& Date –
A Unique No. generated after completion of
Transaction through TM Module with date
SHANBHAG & PARAB ASSOC. CA's 20
Account No. Formation under Finacle
Separate series of Account No. for different Types of Accounts
E.g. A/c. No.34800 204 0006666 , made up of branch code i.e.
34800, Account Type - 204 , Account No.0006666
Transaction event
Entered – Post- Verified-Modified -Authorised
for Valid Transaction there are Two persons- Maker & Checker –
Dual Control matrix used for all transaction
Transaction types and sub type
Tran Type Eg. C- Cash , T- Transfer
Sub Tran Type Eg. CR- Cash Receipts, CP – Cash Payment
General Ledger Concepts
GL->GL subhead->Account
Stage- A- Add , I – Inquiry , V– Verify , M- Modify , D- Delete
Z – Closure
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Exception Types :Control error handle through Warning, Exception and Errora) Warning – Systems gives warning for possible error based on prefixed
criteriab) Exception – Transaction recorded in the exception report for override
rules by userc) Error – Systems gives error message for incorrect value and not allowed
to go further Accounts and Customer Master :
a) ACM : Account Customer Master – Its provide basic detail Cust ID,Accounts types etc.
b) INTTM : Int. table Maintenance Used to modify interest rate on depositsand Advance
c) ACINT : To verify running interest Calculationd) TM&TI : Transaction maintenance and transaction Inquiry – with used of
TranID & Date transaction can be locatede) FTI : Financial Transaction Inquiry – Used to find the transaction based
on various search criteria.
SHANBHAG & PARAB ASSOC. CA's 22
f) SRM : Security Register Maintenance For setting up of Drawing
Power and maintenance of securities , bank officer need to up
date the stock and book debts statement ,Insurance /Valuation date
not filled in
g) ALM : Account Lien Maintenance – used to mark/lift lien from a/c
h) ACTODM : Account TOD Maintenance – Setting up TOD system
allows user to process to specific customer transaction beyond
the regular limit set up at account level TODRP – monthly /yearly
TOD report for all customers System generated TOD – interest ,
bank charges applied as debit in insufficient limit and Manual/user
generated TOD –Payment against clearing allowed within
prescribed limit for specific period
i) LTL : Limit Tree Lookup – Used to monitor utilized and available limit
for customer
j) ACLHM : Account Limit History Maintenance – History of DP and
Limit
SHANBHAG & PARAB ASSOC. CA's 23
k) AINTRPT : Account Interest Reports
l) DDSM : DD/PO Issued Status Maintenance
m) ICHB : Issue Cheque Books
n) ISRA : Inventory Status Report – Stationery available under
SOL ID
o) TDSIP : TDS inquiry/print – Various menu as per different bank
p) BRBPR :Balancing Report for Bills Purchased (Inland) –Long
pending /overdue bills can be verified
q) FBP : Foreign Bill Inquiry – Lodgment (L), Realization ( R) ,
Closure (Z)
r) AFI : Audit File Inquiry - any change in Account status (eg.
Dormant to active)
s) Q -Exit
SHANBHAG & PARAB ASSOC. CA's 24
Under CBS risk is higher if controls are week and
incorrect /incomplete input date entered in the systems
a) Systems Level Checks & Control
Operating systems manual
Password expiration
User ID register
Duty roster
Antivirus updation
Computer manual
Day end control
SHANBHAG & PARAB ASSOC. CA's 25
b) Manual Checks & Control:
• Correct input data and complete filled up in the
systems as per statutory compliance
• Physical verification of Assets and Cash &Security
• Monitoring operation of account and end utilization of
fund
• Opening Advance A/c and deposit as per correct prefix
, Chose correct product is chosen
• Verification of Loan document for compliance with
sanction terms
• Classification of advance as per RBI norms
SHANBHAG & PARAB ASSOC. CA's 26
Zero Balance in account
Loan a/c with zero interest rate
Overdue Term Deposits/LC
Application of Interest, Minimum balance Charges ,
folio charges etc
Vouchers have to initialled by same officer who
authorize on screen
Numbers to be noted on the vouchers for system
generated transaction
Over due instalment & int on advances
Suspense/Nominal /sundry creditors/Sundry deposits
SHANBHAG & PARAB ASSOC. CA's 27
TDS verification , without PAN charge @20% systems
shall applied or not ,filing of return on time
Service tax collection and payment proper data transfer
to H.O/Zonal
Check for 15H/15G
Account closing charges ,DD/PO charges, cheque return
charges
Whether all mandatory report generated ,verify & signed
including Sunday & Holiday
Transaction T.O in CC a/c
Verification of system uploading of transaction during
downtime
SHANBHAG & PARAB ASSOC. CA's 28
Exceptional report –Changes of DP, Review of TOD , if
exceed reported to HO for approval
Duplication of customers IDs
Log Register for change in schemes IDs
Substandard account restructured during the year
Interest variation
Interest applied but failed report for advance & deposit
Advance pending for renewal (Limit Expired )
Frequent over limit CC/OD
Cash deposit /withdrawal beyond define limit
GL Error report
Failure of standing instruction
SHANBHAG & PARAB ASSOC. CA's 29
Debit in income head a/c or credit in expenditure head a/c
Inactive a/c reactivated
Overdue bills and bill returned
Temporary OD above sanction limit/excess allowed
Withdrawal against clearing
Maturity record deleted
Debit balance in deposit a/c.
Advance disbursed by transferring to deposit a/c.
Report on Large cash transaction/KYC
Change in master : check mainly for 29-30 Sept 16,
30-31March 17, 1-3 April 17
Account with negative balance
Used Excel as audit tool
SHANBHAG & PARAB ASSOC. CA's 30
Generally there is separate software for classification of NPA , some of the branch doing manually NPA classification in Customer Master
Exceptional report on change in NPA parameters Verify NPA report for March 16 ,Dec 16 & March 17 Report of irregular advances
BaNCs 24 (TCS) : Mostly NPA report generated from Same CBS systems e.g. CBI additional report generat in ALL in One Program
Finacle (Infosys) : Mostly Finacle base program bank generate NPA report from different software : BOB- Ascrome BOI – SASCAL Dena bank –D2K
SHANBHAG & PARAB ASSOC. CA's 31
Overdue stock/ book debts/QIS statement.
Overdue reviews/ renewals of credit limits.
Expired insurance/ under insurances of securities.
Overdue renewal of loan documents /inspection ofsecurities
TDRs where lien has been lifted.
Loans against TDR where lien not marked.
Cash balance above the cash retention limit.
Divergent trends in income/ expenditure of the currentyear may be analysed with the figures of the previousyear
Window dressing
SHANBHAG & PARAB ASSOC. CA's 32
Suspense accounts are adjustment accounts in
which certain debit transactions & Sundry Deposits
certain credit transaction are temporarily posted &
authorization is pending for approval
Check the nature of entries parked in such Accounts
Check any movement in such old balances and
whether the same is genuine and has been properly
authorized by the competent authority
Provision should be recommended against old
balances(beyond six months) unless recoverable
SHANBHAG & PARAB ASSOC. CA's 33
SHANBHAG & PARAB ASSOC. CA's 34