Branch statutory audit
Year-end audit of a branch's advances, deposits, income and expenses, asset classification and provisioning, with the Long Form Audit Report and certificates the bank requires.
Bank Audit Services in Kochi, Kerala – Branch, Concurrent, Stock and NBFC Audits
T K Chandy & Associates provides bank audit services in Kochi and across Kerala: branch statutory audit, concurrent audit, stock and book-debt audit, revenue and income leakage audit, credit audit, KYC/AML reviews for co-operative banks, and NBFC audits. We take these assignments when a bank or NBFC appoints us, work to RBI and ICAI requirements, and report on time for closing and inspection.
- Led by a chartered accountant since 1994
- Member of SGA World International
- Kakkanad, Kochi
At a glance
Bank audit at a glance
- Who it is for: Commercial and co-operative banks, NBFCs and other lenders that appoint chartered accountants for branch, concurrent, stock, revenue and credit audits.
- How auditors are appointed: By the bank or NBFC, under RBI guidelines and its own board-approved policy. Branch audit panels are drawn up from ICAI empanelment data.
- What you receive: Reports in the bank's prescribed format, LFAR and closing certificates for branch audits, and risk-rated findings for concurrent and special audits.
- Our role: Experienced chartered accountants from Kakkanad who understand advances, IRAC norms, KYC and treasury and meet bank closing deadlines.
A bank audit is any audit of a bank's or lender's books, branches or borrowers carried out by chartered accountants. It ranges from the annual statutory audit of branches at year end, to concurrent audit that runs through the year, to stock and book-debt audits of borrowers that a bank orders before renewing working capital limits.
Unlike most audits, the client does not choose the bank auditor through an ordinary engagement. Banks and NBFCs appoint auditors under Reserve Bank of India guidelines and their own board-approved policies, and branch audit panels are prepared from data that firms submit to ICAI. Firms are allotted assignments by the bank; no firm can promise a bank audit to itself.
At T K Chandy & Associates in Kochi, our chartered accountants carry out bank-related audits when appointed by a bank or NBFC, and help borrowers prepare for stock audits and lender reviews. We do not claim empanelment with any particular bank here; banks and NBFCs that wish to appoint us can contact us for our firm profile.
Bank audit services
Which Bank and Lender Audits Do We Handle?
Our bank audit work covers lenders and the businesses that borrow from them across Ernakulam and Kerala:
- Branch statutory audit of commercial and co-operative bank branches
- Concurrent audit of branches, treasury and processing centres
- Stock and book-debt audit of working capital borrowers
- Revenue and income leakage audit of interest and charges
- Credit audit of loan sanction, documentation and monitoring
- KYC/AML review for urban and other co-operative banks
- NBFC statutory and internal audits
What we cover
What Does Each Type of Bank Audit Involve?
Concurrent audit
Continuous audit of transactions during the year, so errors, irregularities and non-compliance with RBI and bank rules are caught soon after they happen.
Stock and book-debt audit
Physical check of a borrower's stock and review of receivables against the stock statement, to confirm drawing power and the bank's security.
Revenue and income leakage audit
Checks that interest, penal charges, commission and service charges have been applied correctly, with short-collected amounts quantified for recovery.
Credit audit
Review of loan proposals, sanction terms, documentation, security creation and post-sanction monitoring for selected accounts.
KYC/AML review
Review of customer due diligence, risk categorisation, periodic updation and transaction monitoring against RBI's KYC directions, for co-operative banks.
Bank audits compared
Who Appoints the Auditor and When?
Each type of bank audit has its own appointing route and timing:
| Audit | Appointed by | Timing | Main output |
|---|---|---|---|
| Branch statutory audit | Bank, from panels based on ICAI empanelment data | Year end (March–April) | Audit report, LFAR, certificates |
| Central statutory audit of a bank | Bank, with prior RBI approval | Year end, with reviews during the year | Audit report on the bank as a whole |
| Concurrent audit | Bank, from its own panel | Monthly or continuous | Concurrent audit reports, risk-rated |
| Stock and book-debt audit | Lending bank, for selected borrowers | Usually yearly or at renewal | Stock audit report and drawing power check |
| Revenue or credit audit | Bank, for selected branches or accounts | As the bank decides | Findings and amounts to be recovered |
| NBFC statutory audit | NBFC shareholders, following RBI guidelines where applicable | Year end | Audit report and report to the Board under RBI directions |
RBI's guidelines of 27 April 2021 cover appointment of central statutory auditors and statutory auditors of commercial banks (other than RRBs), urban co-operative banks and NBFCs, including eligibility, number of auditors, tenure and independence. Commercial banks and UCBs need RBI's prior approval for each appointment.
Our process
How Do We Carry Out a Bank Audit?
Step01
Appointment and independence
We accept the bank's letter of appointment after checking eligibility and independence, and confirm the scope, formats and deadlines.
Step02
Plan around the bank's systems
We study the branch's or entity's profile, previous audit and inspection reports, and the reports available from the core banking system.
Step03
Advances first
We review large and stressed advances, asset classification and provisioning under RBI's income recognition and asset classification norms.
Step04
Deposits, income and compliance
We test deposits, interest and charges, KYC, cash and suspense accounts, and compliance with RBI and bank circulars.
Step05
Report on time
We discuss observations with the branch manager or management and submit reports in the bank's format within its closing deadline.
For borrowers
How Should a Borrower Prepare for a Stock Audit?
If your bank has ordered a stock and book-debt audit of your business, keep these ready for the auditor the bank appoints:
- Latest stock statement submitted to the bank
- Stock register and item-wise valuation
- Purchase and sales invoices for the period
- Debtor list with ageing and confirmations
- Creditor list for the drawing power calculation
- Sanction letter and loan terms
- Insurance policies covering stock
- GST returns for the same months
- Godown addresses and access arrangements
- Last audited balance sheet
Worked example
Example: Stock Audit of a Kerala Spice Exporter
A bank appointed a firm of chartered accountants to carry out a stock and book-debt audit of a spice exporter in Ernakulam with a working capital limit. The stock statement showed pepper and cardamom stock of about ₹4.2 crore.
- The physical check at two warehouses matched quantities, but part of the stock had been valued at market price instead of the lower of cost and realisable value.
- Receivables included export bills older than 180 days, which the sanction terms excluded from drawing power.
- Insurance cover had lapsed for one godown a month before the visit.
The audit report recalculated drawing power about 9% lower than claimed and flagged the insurance gap. The borrower renewed the policy and revised its valuation method, and the bank adjusted the limit until the next statement.
Fees and timing
How Are Bank Audit Fees Decided?
For branch statutory, concurrent, stock and revenue audits, the fee is set by the appointing bank under its own policy, usually based on the size of the branch or the borrower's limits. For NBFC audits and for borrowers who want help before a bank's stock audit, the fee depends on the size of the loan book or business, number of locations, condition of records and reporting formats. For these, we quote a fixed fee in writing after understanding the scope.
Branch statutory audits are concentrated in April, so banks finalise appointments before the financial year closes. Concurrent and stock audits run through the year.
Key terms
Which Bank Audit Terms Should You Know?
- LFAR
- Long Form Audit Report: a detailed report in RBI-prescribed format that branch and central auditors submit with the audit report
- IRAC norms
- RBI's income recognition, asset classification and provisioning rules for advances
- NPA
- A non-performing asset, generally a loan where interest or principal is overdue for more than 90 days
- Drawing power
- The amount a borrower can draw on a working capital limit, based on stock and debtors less margin
- MEF
- ICAI's Multipurpose Empanelment Form, used to compile panels of firms for bank branch audits and other assignments
Why T K Chandy & Associates
Why Choose Us for Bank Audit Work in Kochi?
CA-led since 1994
Led by T K Chandy Vaidyan, a chartered accountant since 1994, with experienced chartered accountants on every assignment.
Banking know-how
Working knowledge of advances, IRAC norms, KYC, treasury and the core banking reports branch audits rely on.
Built for closing deadlines
Staffing planned so branch reports and certificates are submitted within the bank's closing calendar.
Based in Kochi
From Kakkanad we cover branches and borrower sites across Ernakulam and central Kerala.
Both sides of the loan
We understand what lenders check, which helps borrowers prepare for stock audits and loan reviews.
Independence and confidentiality
Strict ICAI ethics, independence checks before every appointment, and careful handling of customer data.
Related services
Which Other Services Help Lenders and Borrowers?
Stock & inventory audit
Physical verification and valuation of stock for owners and lenders.
Internal audit
Risk-based internal audits for NBFCs, co-operatives and businesses.
Due diligence & special audit
Investigations, forensic reviews and due diligence for lenders.
Project reports & CMA
CMA data and project reports for loan applications and renewals.
Financial (annual) audit
Audited accounts that banks ask for before sanction or renewal.
IT & systems audit
System and access control reviews for financial institutions.
Get in touch
Discuss a bank or NBFC audit
Banks and NBFCs can request our firm profile; borrowers can ask for help preparing for a stock audit. Tell us the type of audit, location and timeline.
Prefer to talk now? Call +91 484 354 1530 or email [email protected].
Who prepared this page
Written and reviewed by chartered accountants at T K Chandy & Associates
This page is prepared by the audit and tax team at our Kakkanad, Kochi office and checked against the Companies Act, the Income-tax Act, GST law and ICAI standards. It is reviewed whenever the rules change.
- Last reviewed 29 October 2026
- Led by T K Chandy Vaidyan, chartered accountant since 1994
- Member of SGA World International
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Tell us your entity type, what you need and any deadline. A chartered accountant will reply.
Ask an expertFrequently asked questions
Bank audit in Kochi – frequently asked questions
Short answers to the questions clients in Kochi ask us most. Still unsure?
Talk to our team01.What is a bank audit?
A bank audit is an audit of a bank's books, branches, transactions or borrowers by chartered accountants. It includes branch statutory audit, concurrent audit, stock and book-debt audit, revenue audit and credit audit, each with its own purpose and report.
02.What is bank branch statutory audit?
It is the year-end audit of individual bank branches, covering advances, deposits, income, expenses and compliance. Branch auditors report to the bank's central statutory auditors and submit an audit report, a Long Form Audit Report and other certificates.
03.How are bank branch auditors appointed?
Banks appoint branch auditors from panels prepared using data that chartered accountant firms submit to ICAI through the Multipurpose Empanelment Form. Allotment is decided by the bank and the panel process, not by the audit firm.
04.What are RBI's guidelines for appointing bank auditors?
RBI's guidelines of 27 April 2021 set out eligibility, number of auditors, tenure, rotation and independence for statutory central auditors and statutory auditors of commercial banks (other than RRBs), urban co-operative banks and NBFCs. Banks and UCBs need RBI's prior approval for each appointment.
05.What is concurrent audit in a bank?
Concurrent audit is a continuous examination of transactions during the year, usually at high-risk or large branches and at treasury. It aims to catch irregularities and non-compliance soon after they happen, rather than at the year-end audit.
06.What is a stock audit for a bank loan?
A stock audit is an independent check of a borrower's stock and receivables ordered by the lending bank. The auditor verifies quantities and valuation, reviews debtors and recalculates drawing power to confirm the bank's security.
07.Who pays for a stock audit?
This depends on the bank's policy and sanction terms. Often the fee is debited to the borrower's account, but the bank appoints the auditor and the report goes to the bank.
08.Can a borrower choose its own stock auditor?
No. The bank appoints the stock auditor from its own panel so the report is independent. A borrower can engage its own chartered accountant to prepare for the audit and reconcile stock statements beforehand.
09.What is revenue audit or income leakage audit in banks?
It is a check that interest, charges, commission and fees have been correctly applied and collected. The auditor quantifies any short-collection so the branch can recover it.
10.What is credit audit?
Credit audit reviews selected loan accounts for proper appraisal, sanction within delegated powers, documentation, security creation and post-sanction monitoring, so weaknesses are fixed before accounts turn bad.
11.Do co-operative banks in Kerala need KYC/AML reviews?
RBI's KYC directions apply to co-operative banks as well as commercial banks. A periodic review of customer due diligence, risk categorisation and transaction monitoring helps the bank stay compliant before RBI inspection.
12.What does an NBFC audit involve?
Besides the normal statutory audit, an NBFC auditor reports to the Board on matters such as registration, net owned fund and compliance with RBI prudential norms, as required by RBI's directions on NBFC auditor's reports.
13.What is LFAR?
LFAR is the Long Form Audit Report, a detailed questionnaire-style report in an RBI-prescribed format that bank auditors submit along with the main audit report, covering advances, deposits, operations and controls.
14.What is an NPA?
A non-performing asset is a loan or advance where interest or principal remains overdue for more than 90 days, subject to the specific rules for each type of facility in RBI's IRAC norms.
15.How can a bank or NBFC appoint T K Chandy & Associates?
Bank audit assignments are allotted by each bank or NBFC under its own appointment process. Contact us for our current firm profile and to discuss the type of audit, locations and timeline.