Banks to audit documents of credits of Rs 5 Crore and above periodically: RBI
As per the directions made by RBI, Banks will have to do periodical audits and re-verification of the documents of all credits of and above Rs 5 crore, till the loan is completely repaid. The instructions have been made in order to check frauds.
As notified by the RBI, the banks should provide quarterly review notes of such audits that include information like number of accounts where rectification is required, list of deficiencies observed by auditors and steps taken to rectify the deficiencies.
The direction came up after RBI found a large volume of frauds at the time when the branches of banks were under concurrent audit. The bank found that frauds were perpetrated on account of the submission of forged documents of the borrower, which were certified by advocates/chartered accountants/valuers.