Branch Audit Checklist - Revised

26-Oct-18
eAudit Implementation at NBP
Audit Checklist
Functional Functional Area Name Sub-Functional Area Code

Area Code
EP010 Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Deposit
Checklist of AML_KYC_CDD-2017
ATM Captured Card Checklist

Evaluation of Internal Control System


Cash and Securities Department

Cash Management Operations(CPC)


Sub-Functional Area Name Test Code
Account Opening Form



Checking of e FATCA undertaking obtained from

the customers

the customers

the customers
the customers
the customers
Common Reporting Standard(CRS)-Due diligence
of customers

of customers

of customers

of customers
Minor Account Holder

Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
A. AML/KYC REVIEW
A. AML/KYC REVIEW
A. AML/KYC REVIEW
A. AML/KYC REVIEW
A. AML/KYC REVIEW
A. AML/KYC REVIEW
Transaction Monitoring
Captured ATM Cards

Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Captured ATM Cards
Policies & Procedures
Staffing
Staffing
Staffing
Staffing
Staffing
Authorization & Approval of Transactions
Documentation & Recording

Reconciliations & Balancing of Books
IT Related Controls
IT Related Controls
IT Related Controls
IT Related Controls
IT Related Controls
Other Controls
Other Controls
Other Controls
Other Controls
Other Controls
Monitoring by the Manager

Monitoring by Controlling Office
Staff Related Issues
Verification of Cash Balances
Deposit of Surplus Cash with Chest / Sub- Chest

Branch/ SBP
Deposit of Surplus Cash with Chest / Sub- Chest
Branch/ SBP
Compliance with Procedures in respect of Head
Cashier’s Hand Balance
Compliance with Procedures in respect of Head
Cashier’s Hand Balance
Compliance with Procedures in respect of
checking of Branch Cash Balance by Manager /
Supervising officer

Supervising officer

Supervising officer
Weekly Physical Verification
Submission of Weekly Certificate to Regional

Officer
Submission of Weekly Certificate to Regional
Officer
Quarterly Cash Verification
Reporting to Currency Officer of SBP
Reporting to Currency Officer of SBP
Cash Processing Centre (CPC)/ Feeding Branch

(FB)/ Standalone Branch
ATM Cash Feeding
ATM Cash Feeding
ATM Cash Feeding
ATM Cash Feeding
ATM Cash Feeding
ATM Cash Feeding
ATM Cash Feeding
Arrangements with other Banks and IEC (Inter-

bank Exchange of cash)
Arrangements with other Banks and IEC (Inter-
bank Exchange of cash)
Supplementary Instructions
Supplementary Instructions
Issuance of Fresh Cash on specific events (e.g. Eid,

Christmas etc.)
Christmas etc.)
Christmas etc.)
.
Audit Test
1. No account should be opened with abbreviation such as “PSO, PTCL,PQCRT” etc. Information Circular 43/2017 dated
14.02.2017.
2. Are the accounts opened after taking authorization of the competent authority at Computerized AOF Portal as per HO
Circular No. 106/2011?
3. Are revised Account Opening Form F-559 related to both for Individual and Business / Government Customers opened as pe
Instruction Circular No-35/2018 dated 30.03.2018?
4. Enough stocks of inventory of AOF supplied to the branches by the Stores and Stationary Wing, Head Office Karachi.
5. Customers fill the hard copy of the Revised Account Opening Form (AOF) and branch official mentions the allocated /
running system based Account Number on it.
6. The form is correctly filled in leaving no column or box of the form unattended.
7. The information related to the customer's (KYC) must also be filled in.
8. The signature of the customer has been obtained on the AOF, its Terms and Conditions and SS Cards.
9. All documents pertaining to AOF have been duly filled in with clear name, without using any abbreviations as per
Information Circular # 43 / 2017.
10. The branch has fed the provided information of the subject AOF in the Account Opening System (AOS).
11. All the fields have been filled in while feeding the received information in the system and they will not take its print out
from the system rather be left for the system integration.
12. The signed version of AOF is available on the branch record for verification and future references.
13. Has TAT improved and overall service quality enhanced?
14. Whether all KYC / AML formalities have been fulfilled before opening of account?
15. Is attested copy of CNIC and passport (in case of Non-resident citizens) obtained?
16. Has the Branch obtained attested photocopies of NADRA receipt / token in case of Expired CNIC/SNIC/NICOP etc? Max.
Period to obtain copy of the renewed CNIC/SNIC is '03' months.
17. Is verification through NADRA verisys obtained before opening of account?
18. Whether a passport size photograph of the new account holder besides taking his / her right and left thumb impression on
the specimen signature card obtained in case of illiterate person?
19. Accounts of individuals who have shaky/immature signatures possess higher risk. Therefore, to mitigate the associated risk
their account should be opened only after approval of relevant Regional Business Head.
20. Is the duplicate copy of AOF delivered to account holders against his/her acknowledgement after opening of the account?
21. Whether title of account of individual customer is same as per the identity document (CNIC / NICOP etc? In-case
Entity/business account, title of account should be same as mentioned in the registration document?
42. Has the Branch utilized FATCA checklist at the time of Account Opening (for Individual / Entity) to perform FATCA due
diligence?
43. Has the Branch utilized FATCA checklist at the time of change in circumstances such as change of address and phone
number, dormancy removal, addition of signatory etc (for Individual/Entity) to perform FATCA due diligence?
44. As a result of above, if any US indicia was found, has the Branch obtained W-9 form (if confirmed US Person) or W8 BEN
form (if confirmed Non-US Person) for Individual applicants?
45. As a result of above, if Entity was US incorporated, W-9 form was obtained from Entity or W8 BEN E form was obtained
from Entity (in all other cases)?
46. W-9 form was properly filled, signed by customer and sign verified by Branch? (Page-1 of W-9)
56. Is branch applying certain due diligence measures with respect to CRS on depository customers accounts opened on or
after July 1, 2017 as per Inst Cir No-72/2017 dated 16.06.2017 and 76/2017 dated 21.06.2017?
57. Is branch collecting certain tax-related information and/or documents from intended account holders. Under certain
circumstances, the Bank will also be required to report and share such information and/or documents with the appropriate tax
authorities in compliance with CRS?
58. Does branch review an Individual / Sole proprietor account holder's and entity information for indicators given in above
referred circulars?:
59. Is CRS self-certification form being introduced. 'Branch Manager / Branch Account Opening Officer' ensured that the CRS
self certification form is filled properly and duly signed by account holder during account onboarding process. (CRS self-
certification form for Individuals & Sole-Proprietors) is attached as Annexure-T)?
60. Is account in the name of minor opened by his / her natural/court guardian?
1. Whether branch staff check ATMs once a day for card captured?
2. Whether the card acquiring branch (NBP branch where ATM card is captured) has immediately enter the captured card
information in the captured card module of CProdx (Customer Relationship Management Portal - CRM) and maintained the
required log?
3. Whether the card acquiring NBP branch (NBP branch where card is captured) retained the captured card under dual
custody?
4. Whether the CProdx system has been updated after delivering the card to the customer?
5. Is there any Suspicious" (For example, plain white plastic card, card bored card or any other card that is unusual in nature)
card found captured in ATM?
6. If yes, whether the same has been marked suspicious in system immediately and the card sent physically immediately to the
ATM Card Management Wing Operations Group, HO Karachi?
7. In case, where the captured ATM card is not collected by the customer from the acquiring branch (NBP branch where ATM
card was captured) but not issuing branch within two (02) working days; whether the branch sent the card along with system
generated letter to the ATM Card Management Wing Operations Group, 7th Floor, NBP, Head Office, Karachi and updated the
card status in system as "Warm Block" (for NBP cards only).
8. In case of acquiring branch, whether the branch update all the cards status as " Return to HO" after dispatching the cards to
the ATM Card Management Wing, Operations Group for onward delivery to the card issuing branch. Any misusage of ATM card
during this period would be the responsibility of the acquiring branch/ ATM card custodian.
1. Are the relevant staff/officials adequately trained in KYC/AML/CFT procedures.

2. Has the branch obtained the necessary information & verified and recorded on KYC/CDD form or account opening form for
identity and due diligence purposes?
Minimum-
[CNIC/Passport/NICOP/POC/ARC number, Existing residential address/registered or business address/contact telephone
number(s)/e-mail (as applicable )/Date of birth/incorporation or registration (as applicable )/Nationality/place of
birth/incorporation or registration (as applicable)/ Nature of business/geographies involved/expected type of counter-parties
(as applicable )/Purpose of account/Type of account/Source of earnings/Expected monthly credit turnover (amount and No. o
transactions)/Normal or expected modes of transactions etc]/FATCA Form
3. Has the branch obtained following forms duly filled in, in all respect from all new relationships and from all existing
customers on periodical review of the account as per Inst Cir.169-2018 dated 12.10.2018. And the copy of the same is available
with account opening form?
1. NBP CUSTOMERS-KYC-CDD FORM
2. PEP IDENTIFICATION FORM
3. EDD (ENHANCED DU ILIGENCE) FORM
4. To identify prospective customer as a PEP, a "PEP Identification Form" is being introduced. This user-friendly checklist will be
filled by Branch staff for all customers (Asset & Liability) at the time of establishing relationship with customer. In case,
customer is identified as PEP, approval for on-boarding will be sought from NBP Compliance Group as per the prevailing AML/
KYC Policy. (Ref Inst Cir No- No-53/2017 dated 10.05.2017).
5. To check that all types of identity cards like CNIC , SNIC , NICOP and smart NICOP are verified through biometric verification.
6. In case account is opened with POC (Pakistan Origin Card) then verification is done through NADRA Verisys as POC is not
being verified in biometric based verification.
53. Are the swift messages / wire transfers accompany complete mandatory originator and beneficiary information as under?
54. In case of occasional customers/walk-in-customers has the branch obtained?

a. copy of CNIC while conducting cash transactions above rupees 0.5 million;
b. Copy of CNIC while issuing remittance instruments e.g. POs, DDs and MTs etc.
55. Has the branch copy of CNIC (regardless of threshold) while conducting online transactions by occasional customers/walk-
in- customers?
56. Are Cash transactions involving sale or encashment (purchase) of prize bonds exceeding Rs 2,000,000 being reported to
FMU?
57. Do branch & Operations Manager strictly use their generic email IDs to respond to all queries raised by Compliance Group
as per Inst. Cir No-79/2016 dated 18.07.16?
58. Are daily alerts generated through FCCM attend as per Inst. Cir No-79/2016 dated 18.07.16?
59. Whether Branch Manager/Operations Manager respond to the queries within 5 days as per Inst. Cir No-79/2016 dated
18.07.16?
60. Does Incharge Deposits / Head Cashier generate list down transactions involving an amount of Rs. 500,000/- or more in
“Large Transactions Activity Report”, on daily basis for review and screening out any suspicious transaction?
1. Whether branch staff check ATMs once a day for card captured?
2. Whether the card acquiring branch (NBP branch where ATM card is captured) has immediately enter the captured card
information in the captured card module of CProdx (Customer Relationship Management Portal - CRM) and maintained the
required log?
3. Whether the card acquiring NBP branch (NBP branch where card is captured) retained the captured card under dual
custody?
4. Whether the CProdx system has been updated after delivering the card to the customer?
5. Is there any Suspicious" (For example, plain white plastic card, card bored card or any other card that is unusual in nature)
card found captured in ATM?
6. If yes, whether the same has been marked suspicious in system immediately and the card sent physically immediately to the
ATM Card Management Wing Operations Group, HO Karachi?
7. In case, where the captured ATM card is not collected by the customer from the acquiring branch (NBP branch where ATM
card was captured) but not issuing branch within two (02) working days; whether the branch sent the card along with system
generated letter to the ATM Card Management Wing Operations Group, 7th Floor, NBP, Head Office, Karachi and updated the
card status in system as "Warm Block" (for NBP cards only).
1. Whether the laid down policies, procedures & circulars of the bank pertaining to the branch operations down loaded and ar
communicated to all staff members of the branch & properly understood?
2. Whether the approved code of conduct is communicated to all staff and got signed by them for implementation and kept in
file?
3. Whether the staff is aware and compliant of laws & regulations including SBP, PRs affecting their responsibilities?
4. Whether the branch manager / operations manager and other staff members are competent and experienced to perform
their duties in an efficient and effective manner?
5. Whether the duties & responsibilities are properly segregated, defined and documented as JDs?
6. Whether the staff performs their duties & responsibilities as per JDs?
7. Whether the required trainings are provided to the branch staff enabling them to carry out their duties in an effective and
efficient manner?
8. Whether the Branch is sufficiently staffed keeping in view the volume & scope of its activities?
25. Whether all the financial & non financial transactions are reviewed and approved by designated individuals at appropriate
levels of the branch?
26. Whether financial / non-financial transactions are duly authorized and properly documented?
27. Whether dual control on all Financial/ Non-Financial transactions including cash receipts & payments (including
government collections and pension payments) and General Ledger entries is made?
28. Whether all financial and non-financial entries are adequately explained and supported with relevant documents /
evidences?
29. Whether all accounting records / books are updated on a timely basis?
30. Whether no direct debit to the GL heads has been made to credit some one’s account unauthorized for financial
accommodation?
31. Whether complete working of audit taken-up date and one complete day working in every Quarter cross checked with the
supporting evidences in order to identify flying entries / mis-posting etc.?
32. Whether an effective reconciliation system in place for Reversal/Exceptional entries and long outstanding entries of NBP
General Account, Suspense Account and Sundry Deposited Account?
33. Whether the un-reconciled entries and differences in the balancing are effectively perused with the concerned authorities
for their resolution?
34. Whether fixed assets of branch are placed under proper security and control?
35. Whether physical counts of assets are conducted and results thereof matched with the records on regular intervals?
36. Whether branch’s record of fixed assets is updated and maintained correctly in the Fixed Assets Management System
"FAMS".
37. Whether the branch has reconciled their fixed assets records with FAMS? The difference should be pointed out promptly
to A&IO for taking up matter with FCG through A&IG in timely manners. [AP No.37].
48. Whether physical access to the computer systems is restricted to authorized personnel only?
49. Whether access to the information / data on the systems is restricted with User IDs & Passwords to authorized staff and
there is no unauthorized Sharing of IDs / Passwords on all application software/ utilities/systems used by branch e.g. CBA, GPS,
GRS, and NADRA etc.?
50. Whether access to the system through user IDs of employee(transferred from/left the branch) stopped by getting the same
disabled/deleted?
51. Whether the CCTV system is installed at proper location and properly working for recording and monitoring of suspicious
personnel / activities in the branch?
52. Whether CCTV recording has been retained as backup for at least 6 months for reference in case of need?
55. Whether the Smoke Detector, Fire Alarms and Fire Extinguishers are installed and found operational in the branch &
periodically checked for maintenance?
56. Whether strong room / vault have not been used for other purpose like record room, kitchen, stationery store etc. (The
Cash Vault must only contain Cash & Cash Equivalents)?
57. Whether the Mandatory Leave Plan is prepared and leaves are allowed to staff accordingly?
58. Whether access to the sensitive areas including Cash Department, Vaults, Computers, etc. has been restricted to authorized
staff only/ No unauthorized person works in the branch
59. Whether no unauthorized persons have been engaged at the branch for any banking related assignments?
87. Whether there is an effective supervision of operations and activities in all areas?
88. Whether the Manager / Manager Operations supervise DTRs / Reviews individual transactions with relevant vouchers on
daily basis to detect flying / unauthorized entries well in time?
89. Whether the branch management takes timely corrective actions for rectification of irregularities/ audit exceptions as
pointed out by internal / external auditors and SBP inspectors?
90. Whether the manager is responsive to internal and external audit recommendations for control improvements on a timely
basis?
91. Whether the staff under suspension, if any, posted at the branch is not given any operational assignment?
92. Whether the operational activities, if any, of the staff already involved / punished in fraudulent activities are minutely
supervised by the branch manager to restrict him / her from further fraudulent activities?
93. Whether the manager adopts necessary measures to keep the staff motivated such as removing their justified grievances
through counseling and taking appropriate action?
95. Whether the officials (RMT) from controlling office periodically visit the branch as per approved frequency for inspection
and submit their reports highlighting the weak areas with directives for corrective action?
96. Whether the controlling office monitors & follows up for the compliance / implementation of their directives given in the
visit reports of RMT?
97. Whether the Compliance Officer posted at the branch / vising Regional Inspector performs his / her duties effectively by
highlighting the discrepancies for corrective action?
98. Whether the controlling office monitors the timely compliance of the Exceptions of Compliance Officers / findings of
internal / external auditors / SBP Inspectors and takes actions to avoid their recurrence in future?
99. Whether the periodical comparison of budget and actual performance of branch is made and variances are investigated for
corrective action by the controlling office?
100. Checking & Reporting of blood/close relative posted in the branch.
101. Removal of staff involved in fraudulent activities.
102. Transaction, amendments and deletion posted in back dates.
Review the Cash Balance Book and note the instances of cash shortages and ensure the following:
1. Whether the instances of cash shortage were reported to controlling office and appropriate measures were taken to find ou
the root causes of shortage and recovery thereof?
2. Whether the physical cash on hand balances agreed with the balances given in the Cash Balance Book?
3. Does the head cashier make the shortage good on the same day of its occurrence? If not made on the same day, is the
shortage debited to Protested Bills Account under advice to controlling office?
5. Is cash in Chest/Sub-Chest within holding capacity?
6. Is surplus cash over the insured limit deposited with Chest/Sub-Chest/SBP? If so, obtain the evidence or inquire the reasons
if there is any non-compliance.
7. Is head cashier’s hand balance matched with the figure appearing in the cash balance book?
8. Is head cashier’s hand balance kept in a separate box with his key?
9. Does branch manager check, at least once a week on different days, entire cash balance and record his remarks on Cash
Book (B-52) under his full signature?
10. Obtain the following Book and Registers and perform the procedures from Point-9 to 13
• Safeguards against Counterfeit Notes
• Authenticity of Registers
• Special Considerations for Currency Chest and Small Coins Depot
• Currency Chest Book, Currency Chest Vault Register and Small Coins Depot Register
11. Is currency chest book maintained in duplicate (one copy is kept with Senior Cashier and the other is in strong room)?
18. Review the currency chest book and small coins depot register for the audit period and check the evidence of weekly coun
by supervising official.
19. Is weekly certificate Form (F-151) of currency chest and small coin deposit balances submitted to the Regional Office
throughout the period under audit? (Vol-I-paragraph no.46)
20. Select any 10 weekly certificates for checking the correct preparation of the certificates.
21. Does Regional Office carry out quarterly cash verification?

22. Are all transactions on the currency chest and in small coin depot promptly advised to Currency Officer of SBP of the area
in which branch is situated on Form TE-2 and F-142 respectively on daily basis?
23. Timely & correct reporting of transaction

affected at NBP Currency Chest to avoid SBP penalty on account of violation of SBP cash management directives as per Inst Cir.
147/2015 dated 16.11.2015.
Whether banknotes issued to public are authenticated and processed?
Whether CPC/FB/ standalone branch has separate clean and secure vault space with proper safe keeping arrangements?
Whether insurance cover of vault, as per value of cash held, has been arranged?
Whether cash fed into ATM(s) is machine authenticated and sorted?

Whether banknotes in ATM are genuine (not forged)?
Whether bags/ ATM cassettes are prepared and sealed in high resolution, CCTV environment as per requisite specifications?
Whether record pertaining to bags/ cassettes is maintained including denomination, date and time of sorting, sealing,
preparing/sealing personnel, transporting personnel, transporting vehicles and name of supervisor?
Whether separate bags/Trays are prepared for all attached ATMs?
Whether bags/ cassettes are remitted with receipt of written acknowledgement from feeding team/officials/ armor
guards/CITs?
Whether CCTV and documentation record for one month is available or CCTV record of all disputed cases is available?
Whether claims/ disputes for any balances pertaining to IEC are settled within 60 days?
Whether CPC/FD/branch ensures compliance of other SBP instructions issued from time to time with arrangements with other
Banks or IEC?
Whether Bank maintains prescribed statement of daily closing cash balance?
Whether minimum one day’s fresh/re-issuable machine authenticated balances is maintained in accordance with the average
daily cash payment?
Whether steps have been taken to mitigate the risk that fresh bank notes issued to NBP by SBP for specific events are not sold
in informal market?
Whether zonal/feeding branches ensure fresh cash replenishment of authorized branches, as per time, demand, supply and
quota?
Whether branch ensures issuance of fresh cash to general public over the counter or against requests received through SMS as
per quota and stock available?
Theme Sub-Theme Exception
Theme Name Sub-Theme Name Exception Type
Code Code Type Code
1 SBP Regulations 0104 Regulatory Violations 104.001 ATM
1 SBP Regulations 0110 Regulatory Violations 110.001 Record Keeping
Cash & Teller Premises Account Opening

2 0201 201.001 Branch Records
& Security /Operations
Clearing & Collections
6 Clearing 0603 603.001 Inward Clearing
Services
Exception Code
E-0104060.001
E-0110090.003
E-0201001.001
E-0603008.001
Exceptions
ATM was out of service for considerable period of time (mention the time period for which ATM remained
out of order during audit period) .
The following formalities were not completed with respect to provision of copies of documents at
customer's request:
Fee charged to the customer for providing a copy of a document under the Guidelines was not reasonable,
and the fee was not properly disclosed to the customer.
Entries in TTR Through Other Banks Payable account were not reconciled within same day.
Debit note created in unauthorized manner for processing of un-cleared cheques.

Responsibility Risk Level
IT High
Branch High
Branch Medium
Branch High

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Branch Audit Checklist - Revised

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26-Oct-18

eAudit Implementation at NBP

Functional Functional Area Name Sub-Functional Area Code

ATM Captured Card Checklist

ATM Captured Card Checklist

ATM Captured Card Checklist

ATM Captured Card Checklist

ATM Captured Card Checklist

ATM Captured Card Checklist

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Evaluation of Internal Control System

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department

Cash and Securities Department