LFAR answering notes, the ten questions that are always answered badly

1

Credit appraisal. Has the branch complied with the bank's procedures and instructions on loan applications, preparation of proposals for grant, renewal and enhancement of limits, and the appraisal documentation?

"Yes, the branch has generally complied."

"We examined the appraisal files of 18 borrowal accounts (14 above Rs 1 crore, aggregating Rs 34.2 crore, being 41% of the Branch's funded exposure; 4 selected at random below Rs 1 crore). Deficiencies: in 5 cases (list at WP A-3.2) the credit rating sheet was not signed by the rating authority; in 3 cases the CIBIL report on file predated the sanction by more than 6 months; in 2 cases (accounts [x] and [y], Rs 2.8 crore) audited financial statements of the borrower for the latest year were not on file and the appraisal was on provisional figures."

2

Sanction and disbursement. Have credit facilities been sanctioned beyond the delegated authority of the branch, and were such cases promptly reported to higher authorities?

"No such instances noticed."

"We reconciled every sanction made during the year (report [name], 212 sanctions, Rs 46.8 crore) to the delegation of powers circular dated [date]. Two sanctions exceeded the Branch Manager's authority: account [x], Rs 55 lakh against an authority of Rs 40 lakh, reported to the Regional Office on [date], 41 days after sanction against the required 7 days; account [y], Rs 30 lakh, confirmed by the Regional Office on [date] before disbursement. Disbursement in account [x] preceded the confirmation."