ODISHA STATE COOPERATIVE BANK LTD.
Compliance to the defects pointed out by the Final Audit for the year 2011-12
Sl.
Defects
(i) Loan Policy :
In pursuance of the provisions of the Bye-Laws of the Bank, the Managing Committee takes
suitable decisions on Loan Policy from time to time, and has delegated the authority and
responsibility in respect of loans and advances to the Loan Committee, Managing Director
and other officers of the Bank. The Bank has been pursuing a crop loan policy of its own
subject to the guidelines issued by NABARD from time to time and the programme for
dispensation of crop loan fixed by the State Government. Besides, the bank adopted a loan
manual developed by NABCONS, the consultancy wing of NABARD.
Compliance
A new scheme for financing the housing loan for purchase of flat / ready built
house was formulated but the same is yet to be placed before the
Management for approval.
During the year of audit, the Bank has not introduced any new scheme of finance.
(ii) System of appraisal :
As observed during the audit, some of the branches are not following the appraisal norms
scrupulously under various loan schemes as per the loan policy. In some cases, the
financial health of the borrowing units, internal resources, maximum borrowing power,
margin requirement etc are not considered at the time of sanctioning/enhancement of limits.
Similarly the eligibility of the borrowers is not derived in a realistic manner and the collateral
securities are sometimes not adequate/ missing. Further, at the time of enhancement the
credit summation, turnover, utilization of credit in case of working capital limit is not stressed
upon. Moreover it is also observed that statement of Assets & Liabilities from the Borrower
& Guarantor not obtained, CIBIL Report is not being generated, in case of Finance made to
Companies the ROC Search Report is not being obtained before sanction of Loan. As such,
the scrutiny and appraisal of loan applications needs further improvement and the officials
need to follow the loan policy, rules and procedure laid down in the loan manual of the
bank.
We have already intimated to all the Branch Managers of OSCB vide our
letter No. 2451(14) dt. 20.07.2012 to follow the loan policy, rules and
procedure laid down in the loan manual at the time of appraisal of loan
applications of borrowers.
Some instances are given below:
HEAD OFFICE
OSHLWCS Boyanica (Loan settlement of Rs.15,97,94,257/-): Pledge of Fixed Deposit of
Rs.15 crore was held, but it is observed that Bank Lien is not marked in the system &
moreover the Fixed Deposit Receipts are also not held by the bank.
The fixed deposit recripts of Rs.15.00 crore of OSHWCS (Bayanika) with our
Main Branch has been marked as care lien to their OTS loans in the system
of Main Branch at present.
1
BERHAMPUR BRANCH
Loan applications are incomplete and some loan documents like deed of guarantee and
hypothecation, DP Note, Delivery Letter are left unfilled even after release of loan amount.
The instances are CC A/c Nos.-57, 88, 101, 113 & 117.
Complied
While sanctioning of different loan accounts, the identification proof and residential proof of
most of the loanees and guarantors have not been obtained. More over in all the cases the
age proof of both loanee and guarantor are also not obtained.
Other banks Post Dated Cheques have not been obtained in the following loan a/cs.
LTNA A/c No. – 189, 190, 191, 195, 196, 199, 200, 204, 205, 206, 207, 209, 210, 212, 213,
215, 218, 219, 220, 221, 222, 223, 224, 225, 227, 228, 229, 231, 232, 233, 234, 235, 236,
238, 240, 241, 242, 243, 244, 250, 251, 253, 255, 262, 263, 264 & 271.
The Borrowers are instructed to replace the PDC
HBL A/c No. - 1840 & 1845.
Without considering the take home salary of loanee that after deduction of EMI which
should not be less than 30% of gross salary or minimum of Rs.5000/- whichever is less. BM
has sanctioned loans which are beyond the repayment capacity of the loanee. Some
instances in this respect are given below:
Loan A/c. No.
LTNA 242
LTNA 260
LTNA 262
LTNA 287
HBL 1841
Limit in
lakhs
2.20
3.30
1.50
1.50
1.00
Net Salary
9555
6872
5236
5625
1989
Amount of
EMI
6200
5800
2600
2600
3400
Net home take
salary after EMI
3355
1072
2636
3025
-
The EMI of the above loans are coming regularly every month.
2
However the EMI is coming regularly.
In some cases it is observed that the remaining service period of guarantors is less than the
tenure of length of loan. Some of the instances are given below:
Loan Account No.
LTNA 189
LTNA 208
LTNA 221
LTNA 222
LTNA 228
LTNA 268
Duration of loan (in
months)
96
96
96
96
96
96
Remaining service
period of the
Guarantor (in months)
60
56
27
67
64
51
In most of the cases OSCB, Berhampur Branch Post Dated Cheques have been accepted
as additional security of some of the Loan A/c. But own bank cheques will not be useful at
the time of need. As such the principle of personal loan scheme fixed by the H.O. has been
deviated. Following are the instances in this aspect.
LTNA Loan A/c Nos.-215, 220, 221, 222, 224, 225, 226, 227, 228, 230, 232, 233, 236, 238,
239, 240, 242, 253 & 212.
It is observed that, in some cases branch has sanctioned the loan amount which is in
excess of the DDO Recommendation. Some instances are given below:
Loan Account
Amount recommended
Amount sanctioned by Branch
No.
by DDO (In Lakhs)
Manager (In Lakhs)
LTNA 206
3.30
4.50
LTNA 225
2.00
4.00
LTNA 256
2.00
4.00
LTNA 260
2.00
3.30
LTNA 261
4.00
5.00
The borrowers are instructed to replace the PDC.
The above loan files are verified and found that the sanctioned amount are
as per recommendation of the DDO.
It is observed that in some cases the joint verification of DDO and Field Officer has not been
conducted before sanction and disbursement of loan amount, which is deviating the
procedure of appraisal. The following are the instances in this respect.
LTNA Loan A/c No.-262
HBL Loan A/c Nos. - 1841, 1843, 1848, 1849, 1850 & 1851.
Complied
Complied
3
HBL-1832: Sri Bhubananda Panda:

Salary Certificate of the Guarantor is not held on record.

Guarantors information is not available

Verification certificate of the BM/Field Officer is not available.

No information is available on nominal share collected from borrower and
guarantor.
Complied
HBL-1831: Sri Balaji Sahoo:
No information is available on nominal share collected from borrower and guarantor.
Complied
HBL-1830: Sri B.C.Mallick
Nominal share is not collected from the guarantor.
Complied
HBL-1842: Sri Debadutta Mishra
Nominal share is not collected from the guarantor.
Complied
LTNA-227: Sri Bijaya Kumar Das

Before sanction there is no official note made to the BM for sanction

No information is available on nominal share collected form borrower and
guarantor.

Verification report of the BM / Field Officer is not available.

Present employment data is not filled up.

Personal loan agreement is not filled up properly.
Complied
LTNA-229: Sri Manoranjan Patra

Before sanction there is no official note made to the BM for sanction.

No information is available on nominal share collected from borrower and guarantor.

Verification report of the BM / Field Officer is not available

Present employment data is not filled up.

Personal loan agreement is not filled up properly.
Complied
LTNA-224: Sri Jairam Behera
 The Form No. Part- II containing Employees data is not signed by the employer.
 Office note is not available before sanction.
Complied
4
LTNA-368: Sri Dilip Kumar Lenka
 Office note is not available before sanction
 No information is available on nominal share collected from borrower and guarantor.
LTNA 368 - relates to Durga Prasad Behera not in favour of Dilip Kumar
Lenka.
PARADEEP BRANCH
Post Dated Cheques have not been collected from the loanee in the LTNA loan files No-33,
34, 36, 37 & 38.
Salary of borrowers are coming to our Branch from which monthly EMI
collected. Repayment is regular in all loan accounts.
Different DDO for the loanee and guarantor is observed in respect of loan account no.
LTNA 33, 36 & 37.
SAILASHREE VIHAR BHUBANESWAR BRANCH
1.
HBL-1125 : S Sankar Roy

Identity & address proof of the guarantor (Loknath Das) was not available.

Seal of Engineer, who prepared the estimate of expenditure, is not affixed.

Bank seal is not affixed & BM signature is not found there in all the
documents.
HBL -1126 : Bhagaban Das
DDO has not signed salary sheet.
Though DDO of Loanee and guarantor is different, all the employees are
working in the office of PPT and their salary is coming to our Branch. All the
loan accounts are also regular.
(i)
In case of HBL 1125 the Branch has informed Sri Lokanath Das,
Guarantor to submit the Identity Proof and Address proof.
(ii) Seal of engineer has already been affixed
(iii) Banks seal and Branch Manager signature has been undertaken.
In case of HBL 1126 the Branch has made the signature of the DDO in the
salary slip of Sri Bhagaban Das.
CUTTACK BRANCH
1. HBL-2495 (G) Smt. Mamata Mohapatra, Limit- 8.50 lacs: Branch has sanctioned a
loan for construction of the house. O/s balance as on 31st March’12 is Rs656385. As per
Interim Audit Report, it is observed that Sri Kedar Chandra Sadangi, who is the husband of
the loanee is designated as co-applicant of the HBL. But, Sri K.C.Sadangi has neither
signed in the loan application form nor his name is entered in the loan application form as
co-applicant. This needs to be looked into.
Sri K. C. Sadangi had earlier availed a CC Loan bearing A/c No-289, which is not operative
since long and it became NPA, whose o/s balance as on 31st March’12 is Rs.236433. The
irregularities of this a/c are given below:
As the land was mortgaged previously to CC-289 and the said CC is not operative since
long and became NPA, there is no justification to sanction another HBL Loan i.e.2495 by
mortgaging the same land which violates the provisions loan manual.
Smt. Mamata Mohapatra and Sri Kedar Chandra Sarangi have been
sanctioned a sum of Rs.8.50 lakh towards construction of house. Sri Kedar
Chandra Sarangi is also designated as Co-applicant of the HBL. Sri K. C.
Sarangi has signed the application form and his name is also entered as
Coapplicant in the system. The land was earlier mortgaged to CC 289 and
the CC A/c was not operative since long. Sri Kedar Sarangi repaid a sum of
Rs.1.00 lakh on 11.05.11 and Rs.2.00 on 02.06.11 and balance outstanding
in the CC A/c was Rs.236466.00 as on 31.03.12. The loanee and guarantor
have signed the DP note towards HBL 2495, which is kept in the file. Out of
sanction amount 1st and 2nd instalments amounting to Rs.595000/- have
been released and final instalment is yet to be released. The value of land
and cost of building (inclusive) covers the security of the entire loan amount.
The loanee and Guarantor have not given any D.P.Note towards HBL-2495
5
The valuation of the land is Rs668250, but bank has sanctioned Rs.8.50lacs omitting the
valuation report.
The total loan o/s is Rs.892818 in respect of CC-289 and HBL-2495 as on 31.03.12 where
as the valuation of land is Rs.668250, which does not cover the security of the entire loan
amount. This needs to be looked into.
2. MTNF-1439 Nalini Prava Das, Limit- Rs.70000: The loan is sanctioned against the
LIC bond worth of Rs.48601 and her husband (Sri Bijay Kumar Das) stood as guarantor,
who is employee of CMC. This loan has some irregularities, which are given below:



Security given by the loanee is not covering the total loan amount.
Purpose of availing loan is not mentioned in the loan file.
No installment is received from the date of finance.
3. MTNF-1441 K.G. Chakravorty, Limit- Rs.5lacs: Branch has sanctioned the loan against
the mortgage of a plot. This loan a/c has some irregularities which are given below:




The said property has already been mortgaged to the branch for a HBL amounting to
Rs.10.00lacs.
In the sanction order it is mentioned that 10 nos. of PDCs are to be obtained. But the
loanee has not submitted any post dated cheque.
No valuation report of the property has been obtained.
No legal opinion has been obtained from the advocate.
The loan is sanctioned against the LIC bond worth of Rs.48601/- and her
husband Sri Bijaya Kumar Das is an employee of CMC, who stood as
guarantor. Earlier, Smt. Nalini Prava Das had also availed one MTNF loan
from the Bank and repaid in time. Keeping her past track record in loan
business, the Branch sanctioned a fresh loan in her favour. However, after
issuing of Demand notice Smt. Das has assured us to repay the overdue
amount.
3. Sir K. G. Chakravorty has availed the loan amounting to Rs.5.00 lakh.
Earlier legal opinion was obtained but, he did not avail any loan. As
mentioned in the sanction order PDCs are obtained. However, he has
already repaid Rs.530000.00
4. Joint verification has not been done in respect of LTNA Loan files from 868 to 924.
4. Although, there is no joint verification form attached in the loan file but,
Annexure-I and Annexure – Ii of application form is signed by the filed officer
/ Branch Manager after verification. A certificate is given to that effect that
the signature of DDO is authenticated.
5. Loanee has to submit the form of authorizing for presenting the cheque along with the
loan application form of LTNA. But, no such form is attached to the LTNA A/c No.-895 &
896.
5. Although, there is no authorization form for presentation, adequate
cheque leaves has been obtained from the loanee. The borrowers of LTNA
A/c 895 & 896 have been requested to submit a fresh form. However, the
status of these two loans are quite regular and no overdue amount shown in
these A/cs as on date.
6
6. In case of LTNA-1076, the loanee has submitted Xerox copy of 1st page service book in
which the name of the employee is not there.
7. Non-MICR cheque of LTNA-933 obtained from the loanee instead of MICR cheque.
8. In respect of LTNA- 888 & 889, guarantor will be retired from service before liquidation of
loan.
9. In case of LTNA-1041, loanee has submitted a PDC bearing no.-671446 of SBI without
signature.
10. Irregularities in financing of LTNA Loans to 79 employees of office of the (R & B)
Division, Cuttack: An amount of Rs.36130000 LTNA loan was financed to 79 employees
of the R& B Division, Cuttack. This amount of finance is totally irregular because of the
employees of the division applied for loan by false DDO recommendations. The total o/s
balance of the above 79 employees comes to Rs.3, 62, 39,777 as on 31.03.12.
Cuttack Road Branch :11. In respect of HBL No.201170 the document (LIC Form) given are not completely filled in
and in case of HBL No.-201171 & 201172, LTNA- 200310 & 200312 verification certificate
has not been signed by the BM and Field Officer.
12. In respect of MTNF 206348, branch has sanctioned loan of Rs.40000/- in favour of
Bijyalakshmi Pattnaik as against Collateral Security of Rs.17000 only.
6. The name of the loanee might be deleted at the time Xerox. However, the
repayment in this A/c is quite regular.
7. The Bank sanctioned a sum of Rs.5.00 lakh to Sri Munael Mohanty an
employee of CRRI on 12.07.11 EMI @8450/- is being deducted by salary
regularly and remitted to the Bank. However, on contact Sri Munael Mohanty
has assured us to replace the Non-MICR cheques with MICR cheque.
8. These two loan accounts are running very smoothly without having any
overdue. DDO is very much punctual in remittance of EMI. However, the
Branch has contacted the borrowers to substitute the fresh guarantor for
which they are agreed.
9. The borrower is an employee of Odisha High Court, Cuttack. Branch has
already obtained 4 nos. of MICR PDC duly signed by the borrower. One
cheque bearing No. 671446 is left unsigned.
10. The departmental inquiry into the matter is in process more ever the
Branch has filed CD cases in respect of 74 borrowers out of which we have
already obtained Decree in 52 cases. Branch is also approaching the
borrowers through recovery drive, as a result of which part payment is forth
coming. Out of 79 cases, LTNA A/c No. 482 of Sri Sarat Ku. Rout has been
closed on 21.09.12. We have also filed 52 nos. 1 CC cases which are in
hearing stage. In one case a land has been mortgaged in favour of the Bank
as security and in that, particular case the borrower is repaying the EMI
regularly and there is no overdue till date.
11. In respect of HBL 201170, the LIC form are left blank as the borrower
has denied to ensure the loan account. In case of HBL 201171, 201172,
LTNA 200310 & 200312, the verification certificate have been signed and
complied.
12 & 13. As regards MTNA 206348 and 206349, both are sanctioned under
Swarojgar Credit Scheme which does not required any collateral securities
as per the scheme approved by Head Office.
13.In case of MTNF 206349 of Ashok Kumar Moharana, the Branch has sanctioned a clean
loan of Rs.25000/- without any security.
7
ROURKELA BRANCH
Loan
Account
No.
MTNA4678
LTNA1918
Sri Pradeep
Kumar Agrawal
Sri Ajaya Kumar
Sahu
LTNA1903
Name
Limit
(Rs. in
lakhs)
5.00
Remarks
 No monthly income certificate attached.
MTNA 4678 - Sri P. K. Agrawal being a businessman has furnished I.T.
Return for availing personal loan against property mortgage.
1.80
 Loan Application form not filled up i.e.
Witness Column.
 Signature of D.D.O not verified by the B.M.
 EMI is Rs6870/- against Net Salary
Rs.6693/-. This needs to be looked into.
Smt. Marry
Maxima Tirkey
2.00
 Updated pay slip not obtained.
 No signature of BM found in the joint
verification certificate.
LTNA1904
Sri Subash
Chandra Sahu
4.75
 The verification certificate not signed by the
BM or the D.D.O.
 Signature of D.D.O not verified by the B.M.
LTNA4684
Sri Samar Bilash
Parida
1.00
 Security has not been verified by BM.
LTNA 4684 – Sri Samar Bilash parida, Security offered by Sri Parida is
SV of LIC policies amounting to Rs.113666/- against loan of
Rs.100000/-. The LIC policies have been duly assigned in favour of the
Bank.
LTNA1912
Sri Panchanan
Giri
3.00
LTNA1915
Sri Narendra
Chhuria
5.00
 Joint Verification Certificate has not signed
by BM.
 D.D.O signature has not verified by the BM.
 Net salary is Rs.9512 & EMI Rs.8450.
hence; the take home amount is not as per
circular. Loanee must not take less than
Rs.3000 pm of salary or wages to home.
LTNA 1912 – The loan has been financed to Sri Dhanurjaya Singh and
Sri Panchanana Giri is the Guarantor. DDO signature has been verified
by B.M.
LTNA 1918 - Sri Ajaya Ku. Sahoo. Witness column filled up. DDO
signature verified by the B.M.
Net Pay Rs.6693.00
Loan EMI of the closed loan Rs.5560.00
Total Rs.12253.00
His present EMI of Rs.6870.00
Balance Salary Rs.5383.00
LTNA 1903 – SMt. M. M. Trikey has furnished salary slip of June 2011
but the loan sanction on the basis of verification of July salary from
DDO. B.M. has signed the DDO signature verification report.
LTNA 1904 – Sri Subash Ch. Sahoo. DDO signature has been verified
by Branch Manager and signed. Verification of employment has been
signed.
LTNA 1915 – Loan has been advanced to Miss Madhushree Panda, Sri
Narendra Chhuria is the guarantor for the loan.
Net Salary Rs.9512.00
Loan EMI of the closed loan Rs.7666.00
Total Rs.17178.00
Present EMI Rs.8450.00
8
Net Salary Rs.8728.00
CC-151
Silicon Tech
2.00
CC-522
Sriya Computer
2.00
HBL-15
Sri D. Hansda
4.00
 The CC has enhanced to Rs.2lacs on
15.05.07 despite irregular transaction in the
account & without any verification of stock.
 A good number of cheques issued by
borrower were returned due to insufficient
fund in the account, but the BM had not
booked the borrower in “Cheque Bounce
Case.
 The BM had extended the facilities to the
borrower despite the fact that the borrower
had already availed a CC facility form the
bank which is NPA (CC-151)
 The building mortgaged to bank was
allotted to him by OHB on 99 years lease
and as per lease agreement the allottee
can’t sale mortgage (building) without the
permission of OHB. The branch had not
obtained the permission from OHB.
 Original DDO Certificate not available & the
Xerox copy was not verified by BM.
 The branch had fixed EMI at Rs.4920
against the net salary Rs.2458 pm of
borrower. This needs to be looked into.
LTNA-1036, the loan has been sanctioned by BM himself without any appraisal.
In case of CC 151 – M/s Silicon Tech. Sri Abhinash Lenka, decree has
been obtained on the dispute case No. 604/2009, and EP is being filed
for the recovery of the loan amount.
CC 522 – M/s Sriya Computer, Sri Abhinash Lenka. Dispute case No.
408/2010 is pending before the RCS Court.
HBL 15 – Sri D. hansda. The original DDOs undertaking for recovery
and remittance of EMI is available in the loan file. Since the special
HBL to Sri D. Hansda was a take over loan from Union Bank, the EMI
with the Net Pay as per note sheet is Rs.6058/- against present
monthly deduction of Rs.4920/-. HO letter No. 4729 dt. 16.07.2005 had
communicated the relaxation of net home take salary of EPF employee
at Rs.800/-.
In the meantime, the overdue amount has been cleared by the
borrower.
(2) Sanctioning / Disbursement
System of receipt and disposal of loan applications, delegation of powers/ authority at
various levels; adherence to authorized limits; allowing of drawals during unrenewed
period; whether funds are disbursed under sanctioned limits after complying with terms
and conditions of sanction, exposure limits to individuals, sectors and exposure to
outside cooperative fold etc. Review of advances including enhancement of limits and
renewal of loan facilities, irregularities found in sanctioning and disbursement.
9
Sanction of various loans primarily vests with the Loan Committee of the Bank. The Managing
Committee delegates the sanctioning power for various loans and advances to the Managing
Director and other officers from time to time. The delegated power for sanctioning of loans and
advances was revised vide office order no. OSCB(C & I) / 10388 / 2008-09 dated 24.03.09,
details of which are mentioned below:a)
Branch Manager up to Rs. 10.00 lakh for House Building purpose and upto Rs. 5.00 lakh
for all other purpose.
b)
Dy. General Manager (C & I) (Agril. & Non-Agril) up to Rs. 7.50 lakh
c)
General Manager (C & I) up to Rs.10.00 lakh
d)
Chief General Manager up to Rs.15.00 lakh
e)
Managing Director up to Rs.25.00 lakh
f)
Loan Committee / Managing Committee – Above Rs. 25.00 lakh
In addition to the above, Branch Managers are authorized to renew the cash credit limits
sanctioned at their level and also by head office pertaining to the accounts of branches
concerned subject to fulfillment of conditions as laid down in the loan manual of the Bank.

As per the above resolution, loans have been sanctioned within the power at various
levels as fixed by the Managing Committee.
i.
While reviewing the various sanctions limits of Cash Credit Accounts, it is observed
that in some cases overdrawals have been allowed without proper authorization.
The details are given below:
Sl.
No.
1
2
3
4
5
6
7
8
9
A/c
No.
19
24
35
36
41
53
59
61
2
Loanee Name
Limit
BERHAMPUR BRANCH
Hindustan Sports and
Enterprises
70000
Pattnaik Nimain Charan
20000
Panigrahi Ram Krishna
90000
Patro Budha
200000
Patro Sudam
10000
Patro Gopal Krishna
50000
Behera Simanchal
50000
Handsome Mens Wear
200000
Rao Basina Krishna
50000
O/s as on
31.03.12
85350.00
24643.00
100367.00
253892.00
12311.00
60695.00
55642.00
233269.00
63134.00
Amount of
Overdrawal
15350.00
4643.00
10367.00
53892.00
2311.00
10695.00
5642.00
33269.00
13134.00
All the cash credit account are examined. In case of CC 48, the limit is
wrongly reported as Rs.20000/- in stead of Rs.200000/-. Except CC A/c
112, all accounts are exceeded limit due to accrural of interest. It is not
a fact that overdrawals are allowed.
10
10
11
12
13
14
15
16
17
18
19
20
21
22
23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
44
48
6
47
8
27
68
76
85
93
95
96
112
102
M/s Sankar Steel
Laxmi Groceries
Prusty Naryan
Goudo Bindo
Maharana Prakash Ch.
P. Chandan Kumar
M/s Masti Restaurant
Mohapatra Nikhil Mohan
Nahak Surendra
Laxmi Tour & Travels
Bajarang Agency
Mahavir Rice Shop
M/s Laxminarayan Store
NET-IN
200000
20000
12500
200000
11000
200000
200000
25000
25000
25000
25000
25000
200000
25000
229941.00
222955.00
13739.00
260788.00
14391.00
276238.00
277220.00
30512.00
26231.64
28241.00
26832.00
28451.00
302905.00
31165.00
29
38
62
115
122
152
163
212
223
251
335
398
417
524
530
550
627
ROURKELA BRANCH
A.B. Garments
150000
Megazin Point
200000
Gosiya Haloo Mahal
85000
Jena Gocerry Shop
115000
Nalini Store
190000
Kathiyawad Road
200000
J.K.Variety
65000
Prakash Travels
200000
Behera Tours & Travels
200000
Construction
180000
Bikas Enterprises
150000
Reena Store
212000
Firngi Hotel
80000
Choice And Choice
190000
Nilakantha Store
90000
Blessing Store
150000
Shree Jaganath Metal
100000
152890.00
242169.00
98714.00
178027.00
195807.00
350548.00
74506.00
228164.00
206721.00
192980.00
207644.00
135120.00
84944.00
218890.00
112495.00
181255.00
113367.00
29941.00
202955.00
1239.00
60788.00
3391.00
76238.00
77220.00
5512.00
1231.64
3241.00
1832.00
3451.00
102905.00
6165.00
2890.00
42169.00
13714.00
63027.00
5807.00
150548.00
9506.00
28164.00
6721.00
12980.00
57644.00
-76880.00
4944.00
28890.00
22495.00
31255.00
13367.00
Overdrawals are not allowed except in CC A/c 152. All other account
limit exceeded due to interest accrual. All these accounts are
unrenewed since long and legal action has been taken by the branch.
11
1
2
3
4
5
6
7
8
9
10
11
12
3
27
5
9
21
25
28
29
31
24
20
43
1
2
3
4
8
15
4
5
6
7
8
9
10
11
12
13
14
15
16
16
22
23
24
25
26
27
35
37
38
41
49
56
CUTTACK ROAD BRANCH
M/s B.T.V
500000
M/s Maruti Builders
500000
Bhanja Udaya
25000
Relation
25000
M/s Kanpur Leather
100000
Sanitary Emporium
500000
BBSR Trading Corporation
500000
Bhubaneswar Auto Distributors
500000
Choudhury Store
50000
Hydro Mechanical Spares Supply
40000
M/s Tania Handlooms
100000
M/s Audio Track
350000
CUTTACK BRANCH
Odisha Textile Mills Ltd.
10000000
M/s Shradha Enterprisers
100000
Rao A. Ganga
50000
Varadwaja Vanijya
Prastistan
200000
M/s Janaki Store
10000
Pradhan Sijaraj
10000
Behera Nirajan
5000
Nayak Banamali
10000
Saha Sapan Kumar
20000
Behera Kailash Chandra
10000
ILU Garments
20000
M/s Sony Shoes
45000
M/s Suman Dress
20000
M/s Prakash Textile
40000
M/s Libaas
15000
M/s Mahalaxmi Fancy
25000
907160.00
748872.27
47189.00
66971.00
201542.75
665426.30
995568.00
761721.25
119151.12
70958.50
154938.70
355143.00
407160.00
248872.27
22189.00
41971.00
101542.75
165426.30
495568.00
261721.25
69151.12
30958.50
54938.70
5143.00
11776975.96
161732.00
203756.00
1776975.96
61732.00
153756.00
227600.00
55531.67
28115.00
12009.00
30233.00
31101.00
34530.00
43325.00
89660.00
40617.00
63145.00
19245.00
48749.00
27600.00
45531.67
18115.00
7009.00
20233.00
11101.00
24530.00
23325.00
44660.00
20617.00
23145.00
4245.00
23749.00
Overdrawals have not been allowed in the reported CC A/cs as far as
our records are concerned except in case of CC 200020 in one
occasion on 25.05.05 and charging of legal fees in respect of CC 3, 27,
5, 9, 25, 31, 24 & 20. However due to capitalization of interest
outstanding has exceeded the limit. CC 200043 has been renewed
upto 25.01.13.
Most of the CC A/cs stand unrenewed sicne long although there is
adequate collateral security against them . Some regular A/cs also
become overdue due to accrual of interest at the month end. The
Branch is insisting for timely renewal of CC A/cs by issuing demand
notice and through personal contact.
12
17
18
19
20
21
22
23
24
25
26
73
74
82
88
90
92
96
97
114
116
1
2
3
4
5
6
7
8
9
10
11
12
5
1016
1017
1025
1013
1010
1034
1024
1012
1014
1021
1039
1
2
3
4
5
34
188
129
57
150
Garments
M/s My Choice
Tarini Veriety Store
M/s Rapid Agency
Pearl Cycle Stores
Mohanty Sudhir Kumar
Choudhury Chittaranjan
Rani Traders
Mahavir Drugs
Dipak Cycle Store
Motorill Enterprisers
100000
20000
100000
500000
75000
4500000
800000
100000
100000
150000
LINK ROAD BRANCH
M/s Matrujyoti Bhandar
200000
M/s Omm Sitaram Exclusive
25000
M/s Rashmi Hotel
25000
M/s Mubarak Dresses
20000
M/s Maa Tarini Store
25000
M/s Hemalata Vandar
25000
OMFED & TEA
25000
M/s Om Maa S.B.Steel
25000
M/s Link Communication
25000
M/s Pradhan
25000
M/s Meera Medicine
25000
Shree Gopal Saree House
50000
PARADEEP BRANCH
Arrobinda Medical Store
15000
Panda Bimanendu
10000
Satapathy Sudhansu Sekher
25000
S.K.Allam
33000
Sahoo Manoj Kumar
27000
112491.00
40998.00
270002.00
635493.00
104174.00
5608668.00
897930.03
149186.13
118003.00
217130.00
12491.00
20998.00
170002.00
135493.00
29174.00
1108668.00
97930.03
49186.13
18003.00
67130.00
296640.90
36817.00
32492.00
36876.00
30102.00
29839.00
28552.00
28024.00
26345.88
27043.00
26370.00
51965.00
96640.90
11817.00
7492.00
16876.00
5102.00
4839.00
3552.00
3024.00
1345.88
2043.00
1370.00
1965.00
39767.00
45690.00
188228.00
45698.00
54124.00
24767.00
35690.00
163228.00
12698.00
27124.00
All loans were sanctioned under Swarojgar Credit Card Yojana. In no
case overdrawal was allowed, it is due to application of interest only. In
case of A/c 1014, outstanding has come down to Rs.20043/- with a
collection of Rs.7000/- on 10.07.12.
Overdrawal allowed in case of CC 24, CC 26, CC 28 and CC 123 and
legal action already taken for recovery. Other than these account, all
other accounts are exceeded limit by accrual of monthly interest.
13
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
15
24
26
86
206
207
210
25
96
100
101
164
222
105
223
226
184
110
111
230
117
42
120
235
127
194
238
130
131
142
72
28
123
268
274
Majhi Sunanda Kumar
Khuntia Purna Chandra
Sahoo Dipti Prakash
Swain Dilip Kumar
Yajjala Masenu
Pradhan Surendra Nath
Barik Purna Chandra
Mohapatra Akshya Kumar
Mohanty Chandra Kanta
Das Ashok Kumar
Behera Benudhar
Sahoo Prafulla Kumar
Muduli Sheshadev
Samal Susanta
Sahoo Prafulla Kumar
Swain Ramesh
Roul Govinda Chandra
Sutal Rajendra Prasad
Sahoo Pradeep Kumar
Das Brundaban
Sahoo Sukumar
Bal Bhagaban
Patra Hemant Kumar
Moharana Akshya Kumar
Swain Surendra Kumar
Mohanty Gyanendra Nath
Pattnaik Manoj Kumar
Swain Uttam Charan
Sarangi Kailash Ch.
Das Padmanav
Nayak Chaitanya Prasad
Fast Track
Parida Gajendra Kumar
Sarala Store
Metro Selection
50000
44000
50000
14000
12000
21000
8000
38000
20000
15000
10000
13000
10000
20000
18000
25000
12000
17000
15000
20000
16000
8000
22000
9000
7000
25000
15000
25000
25000
10000
12000
200000
300000
100000
100000
123996.60
66212.00
238802.65
16750.00
29465.00
37661.00
28254.00
58902.72
33747.00
25692.00
18695.00
39970.00
23476.00
33755.00
50249.00
36136.00
34744.00
57590.00
22898.00
35847.00
26430.00
22807.00
47213.00
21498.00
17329.00
30416.00
18196.00
41669.00
74136.00
21089.00
30686.00
607524.91
693263.00
181531.00
149302.00
73996.60
22212.00
188802.65
2750.00
17465.00
16661.00
20254.00
20902.72
13747.00
10692.00
8695.00
26970.00
13476.00
13755.00
32249.00
11136.00
22744.00
40590.00
7898.00
15847.00
10430.00
14807.00
25213.00
12498.00
10329.00
5416.00
3196.00
16669.00
49136.00
11089.00
18686.00
407524.91
393263.00
81531.00
49302.00
14
41
42
43
266
298
304
Parida Suvendu Kumar
Sahoo Jitendra kumar
Parida Kabita
200000
150000
400000
219070.46
159921.00
514211.00
19070.46
9921.00
114211.00
Legal action taken vide Dispute Case No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7
10
13
15
31
33
37
41
46
50
54
57
61
63
64
66
67
68
69
100010
100013
100017
100061
100075
100079
100087
100089
100091
ANUGUL BRANCH
M/s Mamata Variety Store
150000
Maa Tarini Store Cursher
175000
M/s Saar International
100000
M/s Sravani Electronics
40000
M/s Kohinoor Auto
400000
Sahoo Lambodar
200000
Pradhan Bijuli
200000
Style Shoes
200000
M/s Pradhan Builders
200000
Sahu Jogeswar
200000
Power Electronics
150000
Tripathy Arati
200000
Dalabehera Furniture
200000
Saraswati Garments
200000
S.B.Enterprisers
150000
Mohanty Pravat Ranjan
200000
Sahu Amuya Kumar
100000
Nanda Dipen Kumar
100000
M/s Snigdha Stiching
200000
Das Manoj Kumar
25000
Biswal Hemanta
100000
Pradhan Minaketa
25000
Garnaik Dillip Kumar
95000
Sahoo Pravakar
30000
Maharana Deepak
60000
Beura Prasanna Kumar
150000
Prusty Amitabachan
170000
Dehury Gundicha
150000
159674.00
528360.00
189113.79
60752.00
902746.00
266051.00
260019.00
260553.00
546951.00
246161.00
204222.00
232839.00
245757.00
246827.00
176083.00
249729.00
1255127.00
111717.00
214442.00
33259.00
116075.00
66790.00
105916.00
40604.00
74681.00
186554.00
203044.00
168404.00
9674.00
353360.00
89113.79
20752.00
502746.00
66051.00
60019.00
60553.00
346951.00
46161.00
54222.00
32839.00
45757.00
46827.00
26083.00
49729.00
1155127.00
11717.00
14442.00
8259.00
16075.00
41790.00
10916.00
10604.00
14681.00
36554.00
33044.00
18404.00
322/09
313/09
348/08
197/06
Closed on dt. 24.08.12
Closed on dt. 28.09.12
747/09 Accumulation of Interest
518/09 Accumulation of Interest
341/08 Accumulation of Interest
748/09 Accumulation of Interest
350/08 Accumulation of Interest
739/09 Accumulation of Interest
756/09 Accumulation of Interest
1810/10 Accumulation of Interest
515/09 Accumulation of Interest
511/09 Accumulation of Interest
Wrongly written as Rs.1255127/- instead of Rs.125127/1825/10 Accumulation of Interest
7/10 Accumulation of Interest
379/09 Accumulation of Interest
111/10 Accumulation of Interest
431/10 Accumulation of Interest
30/10 Accumulation of Interest
269/10 Accumulation of Interest
516/10 Accumulation of Interest
517/09 Accumulation of Interest
523/09 Accumulation of Interest
182/10 Accumulation of Interest
15
29
30
31
32
33
34
35
36
37
38
39
40
100094
100098
100101
100108
100111
100112
100114
100116
100119
100122
100123
100131
1
2
3
4
5
6
7
8
9
6
9
20
34
39
49
50
54
104
10
111
11
12
13
14
15
140
141
144
145
152
Khan Sarauzudin
Samal Ranjit
Parida Alok Chandra
Sahoo Ranjan Kumar
Barik Ranjit
Naik Ganguli
Amanta Ranjan Kumar
Rout Sanjay Kumar
Sahu Sumanta
Maa Budhi Indane Gas
Sangita Naik
Parbati Pharmaceuticals
60000
200000
100000
125000
70000
120000
200000
55000
150000
200000
200000
50000
ASHOK NAGAR BRANCH
M/s Ugratara Enterprisers
100000
M/s Health Cure
200000
Behera Cloth Store
150000
Sethy Japani
15000
Das Sri Kumar
25000
Jena Krushna Chandra
15000
Narendra Brajabandhu
15000
Brik Makar
25000
Sethi Sankar
15000
M/s Maa Brabhuja
25000
Communication
Rout Kulamani
140000
Mohapatra Gayatri
25000
Sar Bhabani Shankar
40000
Das Smt. Anita
25000
Mohanty Pravat Kumar
25000
129309.00
253678.00
112070.00
157480.00
86232.00
154640.00
272723.00
72207.00
193746.00
412605.00
231290.00
62424.00
69309.00
53678.00
12070.00
32480.00
16232.00
34640.00
72723.00
17207.00
43746.00
212605.00
31290.00
12424.00
20/10 Accumulation of Interest
183/10 Accumulation of Interest
435/10 Accumulation of Interest
1973/10 Accumulation of Interest
31/10 Accumulation of Interest
37/10 Accumulation of Interest
512/09 Accumulation of Interest
741/09 Accumulation of Interest
522/09 Accumulation of Interest
Closed on dt. 02.05.12
Liquidated on dt. 20.04.12
754/09 Accumulation of interst.
In case of unauthorized overdrawal allowed by the Ex. Branch
Manager, departmental proceedings are drawn against the erring
officers.
1.
255239.00
1163146.56
200761.00
34733.00
52416.00
28498.00
28498.00
33029.00
29123.00
155239.00
963146.56
50761.00
19733.00
27416.00
13498.00
13498.00
8029.00
14123.00
48080.00
23080.00
3.
146955.00
27687.00
43179.00
28424.00
26088.00
6955.00
2687.00
3179.00
3424.00
1088.00
4.
2.
The loan was sanction in favour of Ugratara Enterprisers prior to
22.09.1997 carrying a rate of interest 16.5% p.a. and the limit
exceeded due to accrual of interest upto 30.06.2004, showing a
debit balance of Rs. 255239/-. However the loan will be liquidated
on settlement of OTS.
The CC limit of Rs. 2.00 lakh sanctioned in favour of Health Cure
@16.5% interest prior to 15.10.1997 and subsequently the limit
was enhanced to Rs.5.00 lakh on 10.03.98 after which the limit
was exceeded upto Rs.1163146.56 as on 30.06.2004 by accrual
of interest. However the loanee was applied for OTS which is
pending for disposal.
The CC limit of Rs.1.50 lakh sanctioned in favour of Behera Cloth
Store prior to 07.04.1998 and the limit exceeded upto Rs.2.01
lakh as on 30.06.2004 by accrual of interest and the legal action
was initiated against the properiator.
CC limit of Rs.15000/- was sanctioned in favour of Japani Sethy
under Swarojgar Credit Card Scheme on 30.06.2004 and the limit
was exceeded upto Rs.34733/- by accrual of interest and regular
demand notice was issued to the borrower.
16
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
CC limit of Rs.25000/- was sanctioned in favour of Srikumar Das
under Swarojgar Credit Card Scheme on 03.06.2004 and the limit
was exceeded upto Rs.27416/- by accrual of interest. Personal
contact was made time to time for recovery.
CC limit of Rs.15000/- was sanctioned in favour of K. C. Jena
under Swarojgar Credit Card Scheme and the limit was exceeded
upto Rs.28498/- by accrual of interest. Personal contact was
made time to time for recovery.
CC limit of Rs.15000/- was sanctioned in favour of Braja Bandhu
Narendra under Swarojgar Credit Card Scheme on dt. 27.05.98
and the limit was exceeded upto Rs.28498/- by accrual of
interest. The demand notice has been served time to time for
recovery.
CC limit of Rs.25000/- was sanctioned in favour of Makara Singh
under Swarojgar Credit Card Scheme on dt. 27.05.98 and the
limit was exceeded upto Rs.33029/- by accrual of interest. The
demand notice has been served time to time for recovery.
CC limit of Rs.15000/- was sanctioned in favour of Sankar Sethy,
under Swarojgar Credit Card Scheme on dt. 27.05.98 and the
limit was exceeded upto Rs.29123/- by accrual of interest. The
demand notice has been served time to time for recovery.
CC limit of Rs.25000/- was sanctioned in favour of Barabhuja
Communication, under Swarojgar Credit Card Scheme on dt.
27.05.98 and the interest was compounded upto Rs.48080/-. The
demand notice has been served time to time for recovery.
CC limit of Rs.1.40 lakh was sanctioned in favour of Kulamani
Rout, which is operative upto 30.08.2008 after which the limit was
unrenewed and exceeded upto Rs.146955/- by accrual of
interest. Personal contact has been made by the B.M. and the
loanee assured to close the loan account during December 2012.
The limit was exceeded due to accrual of interest.
CC limit of Rs.40000/- was exceeded by accrual of interest. As
the loanee is not traceable, the guarantor has been contacted
who assured to recover the loan from the borrower.
CC limit of Rs.25000/- was exceeded by Rs.3424/- by accrual of
interest. However demand notice are being issued time to time
for recovery.
CC lomit of Rs.25000/- was exceeded by Rs.1085/- by accrual of
interest and became unrenewed. However demand notices has
been issues for recovery.
17
1
6
KALINGA HOSPITAL CAMPUS BRANCH
Subhalaxmi Clost Store
125000
125669.00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
10
35
97
102
106
107
147
158
159
166
140
162
155
178
211
213
198
284
332
37
83
338
343
367
340
448
167
CHANDRASEKHARPUR BRANCH
Saroj Ku. Padhi
10000
33062.00
Biranchi Narayan Nayak
50000
80927.00
Sen Sanatan
10000
20992.12
Rinki Dresses
10000
36263.00
Shoo Pravakar
10000
37485.00
Deepak Das
12000
33793.00
Kalyan Kumar Cocuk
20000
64081.00
Sukanta Kumar Gout
100000
146782.07
Debaraj Prusty
35000
51183.00
Premananda Rout
30000
66612.00
Alekha Chandra Sahoo
20000
59462.00
Debraj Pattnaik
25000
61955.00
S.N.Panda
100000
174349.00
Ananda Ch. Maharana
12000
33202.00
Anita Panda
60000
96788.00
Bishnu Ch. Mohanty
11000
29482.00
Duryodhan Khatoi
200000
620909.00
Nagesh Ch. Choudhury
46000
86973.53
Bauli Nayak
200000
266044.00
P.C.Sahoo
50000
292977.94
Aftab Alam
25000
72709.00
Prakash Ch. Mishra
500000
1096278.00
Manas Ranjan Mishra
500000
1032374.00
Prasanta Ku. Patra
100000
116109.00
Bansidhar Rout
200000
220868.00
S.K. Banua
100000
111897.28
Techno Agency
200000
210990.32
669.00
23062.00
30927.00
10992.12
26263.00
27485.00
21793.00
44081.00
46782.07
16183.00
36612.00
39462.00
36955.00
74349.00
21202.00
36788.00
18482.00
420909.00
40973.53
66044.00
242977.94
47709.00
596278.00
532374.00
16109.00
20868.00
11897.28
10990.32
Due to conpounding of monthly interest, the limit has been exceeded to
Rs. 669.00, we have already contacted the CC holder to regularise the
account.
The 27 nos. of cash credit account have been exceeded the limit
sanctioned, due to capitalization of interest and all the accounts came
under NPA fold. Disputes have been filed against the defaulted loanees
for recocery of the loan amount.
18
1
2
3
4
5
6
1
2
3
4
5
6
7
1
2
3
4
5
6
7
8
9
10
18
15
21
19
25
30
5
8
4
45
46
26
50
10
17
23
28
106
146
151
191
248
315
SAMBALPUR BRANCH
Samaleswari Sofa Service
80000
Maa Tarini Cloth Store
200000
Verma Manisha
25000
Subasini Tent House
200000
Ashok Kumar Tripathy
25000
Dillip Kumar Bohidar
25000
SAILASHREE VIHAR BRANCH
Roja Medical Store
50000
Antique Granite
350000
Mahalaxmi Store
75000
Debasis Panda
25000
Bibhu Prasad Mohanty
25000
Rashmikanta Barik
25000
S.M.Enterpriser
25000
SAHEED NAGAR BRANCH
M/s Palika Sanjib Das
70000
Chatubhuja Sahoo
200000
Mukta Manjari Sutar
50000
Kashinath Sahoo
50000
Trinath Fabricators
50000
M. Panda
25000
Gauranga Ch. Sahoo
30000
M/s Sabitri Biren Ku. Dash
150000
Pravakar Moharana
400000
Ranjushree Das
50000
108097.00
228310.00
28189.00
229727.00
30499.80
31442.00
53237.00
846956.00
87557.48
27969.00
30859.00
25146.00
25026.00
173430.00
208493.00
210022.00
113233.00
217599.00
92996.00
166022.00
281369.00
508036.00
104032.00
28097.00
28310.00
3189.00
29727.00
5499.80
6442.00
3237.00
496956.00
12557.48
2969.00
5859.00
146.00
26.00
103430.00
8493.00
160022.00
63233.00
167599.00
67996.00
136022.00
131369.00
108036.00
54032.00
In all these case, the outstanding has exceeded the limit due to accrual of
interst and the branch has already initiated legal action against the
borrower for recovery of the loan amount.
In case of all 7 nos. of CC Accounts the outstanding amount exceeded
the sanction amount as the interest has been charged time to time. In
these cases no overdrawal have been allowed. The Branch has already
initiated legal action and three decree copies obtained.
The observation made by the Audit regarding allowing overdrawal without
proper authorization is not correct. It is the factl that all the ten cash credit
accounts were inoperative since long i.e. from the year 1994-1995
onwards. The outstanding as on 31.03.12 shown in the report against
each cash credit account has been exceeded the sanctioned limit due to
charging of interest on those NPA account upto 01.01.04. There after no
interest was charged on those NPA accounts as per letter issued from
H.O. The date of expire of each loan is indicated as under.
A/c
Loanee name
Date of
No.
expire of the
account
10
M/s Palika
09.07.96
17
M/s Bhagabati Store
24.12.04
23
M/s Mukta Travels
26.07.96
28
M/s kasinath Sahoo
31.03.99
106
M/s Trinath Fabricator
10.06.95
19
146
151
191
248
315
M/s Nataraj Mixture
Gouranga Ch. Sahoo
M/s Sabitri
Pravakar Moharana
M/s Sona Xerox
16.02.95
21.03.95
31.03.98
24.01.99
06.01.00
However all the 10 defaulted cases have been covered under legal action.
EP filed in case where decree copies were obtained such as CC 191, 10,
315, 146 and other cases were covered under Dispute.
MAIN BRANCH
Lokanath Adhikari
500000
515256.50
15256.50
Barad Prasana Ku.
25000
25166.00
166.00
Dhrup Deep Fabrication
250000
256401.00
6401.00
Anand Lubes
180000
194982.00
14982.00
Ashok Tours & Travelles
85000
137858.35
52858.35
Agro Consultancy Medeia
50000
54865.50
4865.50
Behera Gopal
80000
83952.75
3952.75
Patra Akshaya Kumar
250000
272123.00
22123.00
Sivani Variety Store
91000
137435.24
46435.24
Mohter India Hospitality
100000
107743.00
7743.00
Patra Nihar Kanta
80000
97441.00
17441.00
Samantasinghar Bichitra
12
784
Mohan
80000
89850.00
9850.00
13
845
Nayak Kunu
80000
85707.00
5707.00
14
581
Pal Chakradhar
200000
423883.00
223883.00
15
413
Rupashree
100000
165298.75
65298.75
16
811
Patra Prakash Ch.
25000
41415.00
16415.00
17
745
Behera Ramesh
100000
114497.91
14497.91
18
760
Nayak Raghunath
25000
38340.00
13340.00
19
755
Sahu Paresh Ku.
25000
54675.00
29675.00
20
746
Patra Purna Chandra
25000
85657.00
60657.00
Gopabandhu Daridra
21
61
Narayan
1650000
1724845.29
74845.29
ii. Some other irregularities found in case of Sanction/ Disbursement of loans in three
branches, which are given below:
1
2
3
4
5
6
7
8
9
10
11
387
903
908
724
395
502
150
830
634
798
823
In case of all the 21 nos. of cash credit accounts branch has not allowed
any overdrawals. Due to accumulation of monthly interest all the CC
accounts have been exceeded the sanction limit. We have already issued
notice to the borrowers to regularize the accounts.
20
BERHAMPUR BRANCH
CC A/c No.-117 (M/s Asish Pharmaceutical Agency): It is observed that the said CC A/c is
renewed during the period under audit which was sanctioned previously having inadequate
security of Rs.155730.00 against CC limit of Rs.2.00lakhs.
CC A/c No.-113 (Balaji Tent House and Suppliers): It is observed that the above CC A/c
has been enhanced from Rs. 50000 to Rs. 1lakh on dt 03.08.11 against tangible security of
NSC of amount Rs.50000/-. But no additional security for rest amount of Rs.50000/- has been
ensured in order to secure the loan cent percent.
As the party has given liquid security of Rs.155730/-, limit was sanctioned
for Rs.2.00 lakh by allowing margin of Rs.45000/-.
Colleteral securities of NSC amounting to Rs.75000/- has been taken as
security for sanction of CC limit of Rs.1.00 lakh.
SAMBALPUR BRANCH
As stated in the Interim Audit Report, we observed that the branch has granted loans against
deposit & loans against postal securities by keeping F.D. Receipt/ R.I Receipt/NSC/KYP etc.
In some cases the maturity dates of the documents have expired, but loan amount is lying
outstanding as on 31.03.12. The details are mentioned below:
LPOS-15: REENA ORAM: - Outstanding as on 31.03.12 Rs.17,980. Maturity date of the
instrument kept as security is dated 17.10.11, but it is observed that loan account not yet
adjusted.
Account closed on 21.07.12
LPS-41: ANANTA KUMAR SAMAL: - Outstanding as on 31.03.12 Rs.61,461. The maturity
date was 31.03.12, but it is observed that the loan account not yet adjusted.
Account closed on 07.07.12
LPOS-26: PREM SWARUP MISHRA: - Outstanding as on 31.03.12 Rs.1,678. Maturity date
was 23.11.11, but it is observed that loan amount not yet adjusted.
Account closed on 20.07.12
3. Documentation
(i)
System of ensuring that documents are executed as per the terms of sanction.
The documents are executed as per terms of the sanction letter. However, in most of the
branches the documents are kept blank and Non Judicial Stamp is not affixed.
The Bank has advised all the brnaches to execute the required
documents in proper format of the bank.
The D. P. Note, Letter of Continuity, Letter of Agreement, etc are being obtained on the
borrower’s firm pad instead of bank’s approved documents viz. in case of Bijayananda
Co-operative Sugar Mills Ltd. and Baragarh Co-operative Sugar Mills Ltd. and also loan
given to CCBs, as such the Management Committee’s attention is required.
The Sugar Mill has been advised to replace the required documents in the
prescribed format.
21
In case of cash credit accounts, when renewals have been made having the same limit,
no fresh sanction letters were issued and acceptance of the terms and conditions
obtained from the borrowing units.
The bank has advised all the brnaches vide letter No. ………….. dt. ……..
to comply all the requirements at the time of renewal. Henceforth the
Bank will ensure that companies common seal shall be affixed.
In respect of Loans sanctioned to company accounts, it is observed that the company’s
common seal is not affixed in all the documents.
(ii) Defects in documentation and suggestions to avoid such defects.
The documentation is done at the respective branch level and generally the documentation is
done in compliance to the terms and conditions prescribed in the sanction order. However, no
document register is being maintained at the branches and in absence of such register, the
branches are unable to establish and confirm the expiry period and release of documents in
case of closed loans. Similarly drawing power register is not maintained by the branches in
respect of working capital limits. Few examples of irregularities in documentation are
mentioned below:Loan
A/c
CC-29
Name of the
Loanee
Sun-XConfectionery
LTNA575
Akshya Kumar
Behera
LTNA577
Jakir Mohamed
LTNA578
Anil Kumar
Bhoi
LTNA581
Miss Raja
Laxmi Nayak
LINK ROAD BRANCH
Limit
Observations
(in lacs)
 Sales Tax Registration Certificate not
held on record.
 Salary Certificate does not indicate the
month.
 No Post Dated Cheques held in the file.
1.00  Guarantor’s document are not held in
the file of loanee.
 No estimate of the renovation of house
was held.
 No Post Dated Cheques was available.
 No document of guarantor was held.
2.00
 No estimate of sister’s marriage
expenses on record.
 No post dated cheques was available.
 No document of guarantor was held.
2.00
 No estimate of sister’s marriage
expenses on record.
 Permission of Employer needs to be
9.00
obtained.
 Guarantor Salary Slip not available on
CC 29 – Sales Tax (VAT) clearance certificate has been kept in the file
which indicates the registration number.
LTNA 575 – Salary certificate does not state month. It is available in bill
as well as the copy of the pass book which confirms the net salary. A set
of guarantors document has been kept in the file now.
LTNA 577– It has been regularized now.
LTNA 578 – It has been regularized now.
LTNA 581 – The borrower is an OFS Officer and working as Asst.
Trearury Officer, Spl. Treasury Officer (DDO) has forwarded the proposal
22
record.
Guarantor information like Salary
Cerfitcate, DOB, and Voter I Card not
held on record.
No Post Dated Cheques was available.
Guarantor’s information was not
available.
and has signed in the Bank’s prescribed proforma. The loan has been
repaid in advance by Rs.2.23 lakh as on date.
Appraisers Certificate Column No.- 8 & 9 towards value per gram and total value column
has not been filled up in the Gold Loan A/c No.- 62, 60, 59, 58, 57, 56, 55.
Out of these seven accounts, 59, 58 & 55 are closed. In case of other
accounts, the column No. 8 & 9 have been filled up.
A document relating to appointment of Niranjan Jethy as appriser is not available at
Branch Level.
Sri Niranjan Jethy is engaged by the Cuttack Branch who also makes
appraisal in Link Road Branch.
Checking of MTNA Loan: Guarantors information are not available in the file of loanee
like voter Identity Card, Salary Slips, Service Book Xerox Copy, Share Capital Deposit
proof etc.
In every file, as per rule, any one of the I card likes PAN or Office, I card
or DL or Voter I Card is available not necessarily only Voter I card kept
towards identity. There is no such exception where salary slip is not
available. In case of guarantor Xerox of Service Book of the borrower is
also available in File. Each borrower happens to be guarantor for some
one. In case of salary earners their service particulars are verified and
copy of the salary slips / certificates as well as service book are also
available in file.
LTNA608
LTNA610

Kailash Kandi
Bijaya Kumar
Bhyan
1.00


3.40
LT Loan Ind. Housing: As per the sanctioned order SL-7 the building shall be insured in
the joint names of the Bank and Borrower which has not been done. The amount on the
Demand Promissory note is not filled up in the HBL Loan A/c No.-684, 692, 699 & 701.
LTNA 608 – It has been regularized now.
LTNA 610 – It has been regularized now.
The Branch is making credit life insurane with LIC in group.
The Branch has comeplied by filling the demand promissory note
Loan
A/c No.
LTNA100324
ASHOK NAGAR BHUBANESWAR BRANCH
Limit
Name
(In
Observations
Lacs)
 Original salary sheet of guarantor was not
available
 Seal of BM not available in schedule of
S K Nayak
02.00
individual borrower’s form.
 Loanee and guarantor’s identity proof has not
available.
 Guarantee Deed not available on record.
LTNA 100324 – All the defects of documentation are now complied.
23
MTNA100258
HBL101458
Tuni Nayak
Sri Devadutta
Mohanty
1.85
05.00







LTNA100353
Sri S Ch.
Mishra
09.00
MTNA100268
Sri P Nayak
03.50
HBL101480
Sri A Ch Rout
CC-28
Sri
Radhashyam
Meher
04.00








5.00




CC100203
M/s OSWAL
7.00


Application form has not filled up properly.
Guarantor’s Identity Proof not available on
record.
Guarantee Deed not available on record.
Verification certificate not signed by BM.
Purpose of loan & details of property
mortgaged by the loanee was not mentioned
in the application form.
Guarantor identity proof has not been obtained
Borrower & guarantor salary slip held without
signature seal of DDO
Guarantor identity proof not obtained.
Guarantee deed not obtained.
Personal loan agreement taken without branch
manager signature and without seal.
Guarantor and borrower salary slip not
obtained
Guarantee deed not obtained
Verification certificate is held on record without
signature of the field officer.
MTNA 100258 - All the defects of documentation are now complied.
Fresh Hypothecation Agreement needs to be
obtained as the existing agreement was
obtained in the year 1998.
VAT Return not held on record.
NJS not affixed in Hypothecation Agreement.
Letter of acceptance through a resolution of all
partners not held on record.
All the partners should give undertaking in
stamp paper that they would be jointly or/and
severally liable for repayment of bank dues but
it is observed that the same not held on
record.
Guarantor has not signed the loan agreement
& the date was also not mentioned.
Date not mentioned in the DP Note in respect
of original sanction is concerned.
CC 28 – Intimation was issued to the borrower for submitting fresh
agreement vide our letter No. 1839 dt. 06.12.2012.
HBL 101458 - All the defects of documentation are now complied.
LTNA 100353 - All the defects of documentation are now complied.
MTNA 100268 - All the defects of documentation are now complied.
HBL 101480 - All the defects of documentation are now complied.
CC 100203 – Intimation was issued vide our letter No. 1836 dt.
06.12.2012 to comply the defects of the Audit.
24

CC101130
Lingaraj
Electrical &
Electronics
5.00




HBL101332
Banaj Basin
Routray
5.00



CC100001
(LTNA)
Sworna
Hospital (P)
Ltd.
375.63



As per legal opinion it is observed that the
advocate does not state about verification
made in the tahasildar office.
Working Capital assessment for 5lacs has not
been carried out by the branch..
Balance Sheet as on 31st March’04 held on
record without borrower signature.
VAT Return not held on record.
NJS not affixed in the term loan agreement for
housing loan for both 5 lacs & 3.5 lacs
respectively.
DDO of Capital Hospital has signed the Salary
Slip without Seal & it is silent about which
month it related.
Completion certificate not held on record.
The company has divided some portion &
applied for revised plan to BDA, but it is
observed that the same not held on record.
Company common seal has not affixed in all
the documents.
Completion certificate not held on record.
Holding Tax Paid Receipt not held on record.
CC 101130 – The legal opinion has been obtained from the empanneled
advocate of the Bank. The borrower has been informed to produce
balance sheet as well PL account at the time of his next renewal.
HBL 101332 – Both the agreement of Rs.5.00 lakh and Rs.3.50 lakh are
now affixed with Non Judicial Stamp. DDO of Capital Hospital has signed
the salary slip with seal and date. The loanee was infomnred to produce
the completion certificate vide our letter No. 1839 dt. 06.12.2012.
CC 100001 – The matter was referred to Head Office which is under
consideration. Further the borrower has been intimated to comply the
audit defects vide letter No. 1838 dt. 06.12.2012.
CHANDRASEKHARPUR BHUBANESWAR BRANCH
Loan A/c
No.
Name
Limit
(In Lacs)
CC –192
Mayur Offset
Printers
7.00
CC -472
Trupti
Hardware &
Paints
5.00
Observations
Latest VAT return not held on record.
Balance Sheets as on 31.03.08 to 31.03.11
held on record without borrower’s signature
Building insurance not held on record.
Valuation report held with the bank is more
than 3 years old but fresh valuation report not
held in record.
VAT return not held on record
BM signature not found in the documents
obtained for Rs.5 lacs.
CC 192 – Mayur Offset & Printers has submitted the last VAT return,
Balance Sheet with signature. We have advised him (Proprietor) to submit
the building insurance before next renewal of the limit. However the
operation of the account is quite satisfactory.
CC 472 – Present Branch Manager has signed in the face of the
25
CC -399
CC -186
RND
Laboratories
Pvt. Ltd.
M/s Guru
Mahima
Cement
Store
1.50
18.00
Agreement for hypothecation and guarantee
for Rs.5lacs not held on record as the limit is
enhanced from Rs.2lacs to 5lacs.
As per balance sheet as on 31.03.11 it is
observed that sundry creditor of Rs.1064084/is very much on the higher side; hence the
branch should advise the borrower to keep
the sundry creditor at the minimum level.
Supplemental mortgage deed Xerox copy held
on record instead of original.
Latest revenue rent paid receipt not held on
record.
Common seal of the company not affixed in
the agreement for hypothecation and
guarantee.
Guarantee Agreement obtained from N Dash
not filled in properly and also NJS not affixed.
Agreement from D K Dash not held on record.
Memorandum & Articles of Association not
found on record.
Search report before sanction of loan not held
on record.
Tax Audit report not held on record.
Drugs license copy not held on record.
Latest Encumbrance Certificate has not been
taken.
Latest valuation report needs to be obtained.
Latest Tax Audit report not held on record.
CC appraisal not found on record.
Identity proof should be verified by BM.
Current Account with SBI needs to be closed.
There is huge amount of difference between
Actual & Projected Balance Sheet as on 31st
March’10. This needs to be clarification from
the borrower.
application. He (proprietor) has submitted the following documents details
below.
1. Agreement for hypothecation and gurarantee for Rs.5.00 lakh with
due discharge.
2. Supplementary mortgage deed has been obtained in original.
3. Rent receipt of last financial year collected.
CC 399 – Common seal of the company is already been affixed in the
hypothecation and guarantee agreement.
And NJS affixed on the face of the agreement form. The copy of the drug
license, MOA, AOA and Tax Audit Report is kept with file.
CC 186 – Upto date EC before mortgage and after mortgage, valuation
report of the land as reported by the Manager (T) are in the file. Because
we don’t have CBS facility for transfer of Funds he needs to maintained
the account with SBI for transfer of funds.
26
MTNF1469
Nakula Ch.
Sethi
5.00
Sanction letter is not filled up properly & BM
has not verified it.
Application form is not filled up correctly and
some places are kept blank.
Agreement for Hypothecation & Guarantee
has not affixed by stamp according to Stamp
Act.
Agreement for Hypothecation form is not filled
up.
Continuing security letter, DP note,
undertaking form, not filled up.
Documents are not signed by loanee &
guarantor & those documents have not been
verified by BM.
MTNFS 1469 – As per documentation parts, all defects are complied and
kept in the file.
It is noticed from Interim Audit Report that due date register which has been maintained by the
Branch is not regularly monitored to find out the date of maturity of the LPOS instrument. As a
result of which, some LPOS have already been matured since long, but necessary adjustment
has not been made to liquidate the loan a/c in time. Some of the examples are given here
under:A/c No.
Date of
Finance
Amount
Outstanding
297
325
342
366
26.08.03
28.01.05
19.12.05
29.12.7
133362.00
24774.00
21967.00
13423.00
Date of Maturity of
the Instrument
Actual date of
Surrender
06.12.08
25.01.11
21.02.11
20.03.12
20.05.12
18.05.12
18.05.12
18.05.12
These accounts are closed after due dates by oversight. Now all LPOS
accounts are closed on due dates.
CUTTACK ROAD BHUBANESWAR BRANCH
Loan A/c
No.
CC-85
Name
Bimala Motors
Limit
(In Lacs)
Observations
Agreement of Hypothecation and
Guarantee has not been executed.
1.00 Statutory documents like Sale Tax
Return, IT Return and Balance Sheet
have not been submitted by the
CC 85 - IT return obtained and kept in the file. We will ensure for
submission of balance sheet and ST return of the time of next renewal.
27
CC-82
Omm Satyam
Sivam Traders
2.00
CC-80
Aditya Medicine
0.50
CC-83
Bijaya Kumar
Pani
2.00
CC-34
Chandra Muli
Travel Points
CC-44
Jay Bajarang
Traders
CC-53
M/s S.K. Motors
CC-68
Maa Salara Auto
Parts
1.50
loanee.
Agreement of Hypothecation and
Guarantee has not been executed.
Agreement of Hypothecation and
Guarantee has not been executed.
Agreement of Hypothecation and
Guarantee has not been executed.
Bipartite Agreement between the land
lord and the tenant has not been
ensured at the time of renewal of CC
limit.
The stock statement has been
submitted in a plain paper without any
signature. But the same has not been
reflected in the Balance Sheet as on
31.03.11 submitted by the loanee.
There is a short fall of Rs.50000/between the sanctioned limit to the
borrower and the security obtained
form the borrowers against sanction
limit of Rs.1.05 lakh. The tangible
security is available for Rs.1.00 lakh
only. No additional security has been
collected at the time of renewal in
order to secure the loan cent percent.
Stock Hypothecation deed has not
been executed.
Stock Hypothecation deed has not
been executed.
Business viability has not been
considered at the time of renewal of
CC Limit i.e. the Financial Statement
12.50
for the year 2010-11 of the firm
exhibited a net profit of Rs 4819.40
only.
Partnership Seal is not affixed in the
application form.
Hypothecation of stock and guarantor’s
2.00
deed has not been executed.
5.00
CC 82 - Complied
CC 80 – Complied
CC 83 - Complied
CC 34 - Rent agreement submitted. 100% security in shape of FD / RI
hae been kept and the a/c is renewed upto 16.08.13.
CC 44 - Complied
CC 53 - CC limit has been renewed considering to 100% collateral
security. Fixation of partnership seal on the application form complied.
CC 68 - Complied
28
CC-88
Rutu Auto
Electrical
CC-42
M/s Shree
Ganesh Hardwar
Store
HBL201196
Niranjan Lenka
SRTO206353
Jagdish Patra
CC-43
Audio Track
The loan application for renewal of limit
has not been filled up properly.
Agreement for Hypothecation and
Guarantee has not been executed.
CC limit was sanctioned for Rs.50000/0.50
against assignment of LIC Policy
having the surrender value of
Rs.23885.00. But no additional
security has been collected at the time
of renewal.
At the time of renewal on dt.03.09.11
all the documentation papers like DP
Note, Delivery Letter, Demand
Promissory Note, Revival Letter,
Continuity Security Letter have not
7.50
been executed.
Renewal application form not filled up
properly except the name and address
of one partner Sri Manoj Ku. Agarwal
all other columns are left blank.
Completion certificate not held on
record
10.00
Building insurance copy not held on
record
Hypothecation Agreement has not
been stamped and filled up.
5.00 Purchase bill, money receipt, duplicate
bill, Insurance copy and RC book not
held on record
Periodical inspection report not held on
3.50 record.
CC 88 - Complied. Regarding security aspects we will ensure at the time
of renewal.
CC 42 - On compliance we have renewed the a/c upto 21.05.13.
HBL 201196 - Completion certificate is kept in the file. The borrower and
insurance company have been informed to submit the insurance copy in
duplicate as it has been issued earlier as per report of TATA AIG
personnel.
SRTO 206353 - Hyphecation agreement has been stamped and filled up.
The borrower has been requested to submit RC book, money receipt,
duplicate bill, insurance copy of the vehicle.
CC – 43 - The field officer has verified stock on 21.05.12
29
Violating the principle of maximum limit of personal loan scheme, the BM has sanctioned the
loan beyond the eligibility of the borrower as detailed below:
Loan A/c No.
Limit
MTNA 1489
LTNA 346
LTNA 449
LTNA 451
530000.00
150000.00
190000.00
160000.00
No. of Installments
40
48
96
84
Actual
Eligibility
476000.00
113000.00
156000.00
112000.00
MTNA 4189 - Regular repayment is forthing. There is no OD in the A/c.
LTNA 346 - There is only one instalment overdue as on 31.10.12
LTNA 449 - There is only one instalment overdue as on 31.10.12
LTNA 451 – Regular repayment is forthcoming. There is no OD in the A/c.
Deviation from the terms and conditions regarding remaining service period of the guarantor,
the BM has sanctioned loan to the borrower.
Remaining
Repayment
Limit
Loan A/c No.
Service period of
period fixed for
(in lacs)
Guarantor
the loan
LTNA 358
1.00
82 Months
96 months
While appraising, guarantors service period against LTNA 200358 has
been wrongly slipped. However the repayment is regularly forthcoming.
There is no OD in the account so far.
It is seen in most of the cases while sanctioning and disbursement of different loans the
residential proof of both loanee and guarantor have not been obtained. In some cases the
identity proof of both loanee and guarantor are also not obtained which is a deviation of the
KYC norms.
Most of the borrower and guarantors are having their SB A/cs with us.
Proof of KYC in respect of identity and residential proof are kept in their
SB A/c. On the later date KYC norms have been complied.
It is observed that in some cases the CC limit has been sanctioned previously by obtaining
lower securities than the sanctioned limit. Some of the instances are given below:
A/c No.
Limit
(in lacs)
Date of
Sanction
34
80
85
88
89
1.50
0.50
1.00
0.50
0.50
22.03.02
12.08.08
03.06.10
25.11.09
26.11.09
Value of
Securitie
s
Obtained
100000
24790
39352
23885
15000
Amount
Shortfall
in
Security
50000
25210
60648
26115
35000
Date of
Last
Renewal
15.08.11
27.10.11
20.09.11
24.01.12
17.12.10
MTNF (SRTO) Loan A/c No-206217:
The charge of the bank on the vehicle in term of Hypothecation not been registered with the
concerned Regional Transport Authority.
CC – 34 - Complied and renewed upto 16.08.13
CC 80 – The borrower is instructed to offer more security.
CC 85 – The borrower is instructed to offer more security.
CC 88 – The borrower is instructed to offer more security.
CC 89 – The borrower is instructed to offer more security.
MTNF (SRTO) 206217 – The borrower has been requested to submit the
related documents.
30
Insurance Coverage of the vehicle in the joint name of the bank and borrower has not been
made.
The duplicate key and the Xerox copy of the RC Book of the vehicle not held on record.
In some cases the documents held are not completely filled in. such as LIC form in respect of
HBL No.201170 is not properly filled in and in case of HBL No.-201171 & 201172, LTNA200310 & 200312 verification certificate has not been signed by the BM and Field Officer.
In respect of MTNF 206348, branch has sanctioned loan of Rs.40000/- in favour of
Bijyalakshmi Pattnaik as against Collateral Security of Rs.17000/-.
All accounts complied except HB loan A/c 1171.
The Branch has financing loan without keeping any collateral security
under “Swarojagar Credit Card Scheme”. Loan A/c MTNF 206348 &
206349 were financed under “swarojagar Credit Card Scheme”at that
time.
In case of MTNF 206349 of Ashok Kumar Moharana, the Branch has sanctioned Rs.25000. without any security.
MAIN BRANCH
Loan A/c
No.
CC-646
HBL-2685
SRTO1363
CC-575
Name of the
Loanee
Laxmidhar
Behera
Basantilata Majhi
Anjali Behera
Ushman Fish
Traders
Limit
(In Lacs)
12.00
13.50
8.86
25.00
Observations
Latest Tax Audit Report needs to be
obtained.
Latest Rent Paid Receipt not held on the
record
Latest Municipal Tax Paid receipt not
obtained.
NJS not affixed in some documents.
R.C book not held on record.
Agreement
for
hypothecation
&
Guarantee not filled up properly.
Encumbrance Certificate obtained upto
August’08, hence Broken Period
Encumbrance Certificate to be obtained
up to the loan disbursement.
Sales Tax Registration Certificate not
held in record.
Municipal Tax Paid Receipt not obtained.
Latest Revenue Rent Paid Receipt not
obtained.
CC 646 - already been closed.
HBL 2685 - We have requested the borrows to submit the required
documents as per audit observation vide our letter No. 3002 dated
22.11.12.
SRTO 1363 - We have requested the borrower to submit the required
documents as per audit observation vide our letter No. 3004 dated
22.11.12.
CC 575 - We have requested the borrower to submit the required
documents as per audit observation vide our letter No. 3003 dt. 22.11.12.
31
CC-321
CC-712
CC-322
M/s Rabindra
Agencies
Ashrika Udyan
Bitarak Pvt. Ltd.
12.00
12.00
12.00
Partnership Firm’s Seal not affixed in the
Revival Letter & D.P. Note.
VAT Return copy not obtained.
Rent Paid Receipt not obtained.
Tax Audit Report not held on record.
Municipal Tax Receipt not held on
record.
Building Insurance not done.
Registration of Partnership deed not held
on record.
VAT return copy is need to be obtained.
Latest Tax Audit Report needs to be
obtained.
Partnership Firm Seal not affixed in D.P
.Note, revival Letters, continuity security
letter
Rent Paid receipt not held on record
Municipal Tax Paid receipt needs to
obtained
Mortgaged (Building) has not insured.
Company common seal not affixed in all
the documents
As per Balance Sheet as on 31.03.11,
the company is maintaining Current
Account with UBI – CA9646, SBI CA –
30928222235 need to be closed.
Huge difference between projected and
actual Balance Sheet as on 31st
March’11 is noticed.
Tax audit report not held on record.
Latest EC not held on record.
Rent paid receipt not held on record.
Municipal tax paid receipt not obtained
ROC search and charge creation not
found on record
Drug license copy not found in record
Site visit report not found on record
Pre and post sanction report not held on
record.
Loan appraisal not found on record.
CC 321 - The borrower has already been submitted the required
documents as per the defects pointed out by the audit.
CC 712 – The borrower has already been submitted the required
documents as per the defects pointed outby the Audit.
CC 322 – Complied
32
CC-744
Pradhan Pharma
Ceuticals
48.00
Assets and liabilities statement or the
borrower & guarantor are not held on
record
Credit report is also not held on record.
Agreement for hypothecation and
guarantee not filled up properly
NJS not affixed on some documents
Pre and post sanction inspection report
not held on record.
Drug license copy not found in the
records.
Latest revenue rent paid receipt and
municipal tax paid receipt not held on
record.
Legal opinion not found on record.
CC 744 – The loan account has already been closed on 25.09.12.
Irregular finance of LTNA loan to the IDCO employees under the salary earners scheme :
During the year 2010-11, the finance made to 30 employees of IDCO are treated as irregular as the
signature of DDO’s have been forged by the beneficiaries while availing such loans from the bank. As
the DDO’s signature is forged, the entire finance is treated as irregular/illegal. The total outstanding as
on 31st March’12 is Rs.10489041. IDCO, being a Odisha State Government undertaking, this forgery
should be brought to the notice of IDCO Management and the Controlling Departments of Industry &
Public Enterprises as this is a very serious matter. The 100% provision has been made against these
30 nos. of loanees. The details are given below:
Sl.
No.
1
2
3
4
5
6
7
8
9
Name of the Loanee
P.C. Sahoo
K.C. Bhoi
Gajendra Das
Laxmidhar Jena
Mathuri Mallick
Gunnia Mallick
S.P.Ray
R.K.Pattnaik
Niranjan Swain
Loan
A/c
No.
200
202
203
204
205
206
207
226
230
Date of
Finance
27.08.10
28.08.10
28.08.10
28.08.10
28.08.10
28.08.10
28.08.10
29.09.10
04.06.10
Amount
of
Finance
450000
450000
490000
490000
400000
450000
490000
400000
300000
O/s as on
31.03.12
457912
455809
483064
498444
406916
446734
502746
406781
306728
No. of
month
s OD
13
13
11
13
13
9
12
14
13
As epr the observation made by the Final Audit regarding irregular
finance made by the branch to the 30 nos. of employee of IDCO
we have contacted all the borrowers regarding repayment of the
loan and issued demand notice.
In the meantime the management of IDCO has handed over the
matter to the vigilance and the matter is pending with Vigilance.
OD as on
31.03.12
90675
88800
83335
98800
80600
64268
90656
86800
60450
33
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Dhaneswar Ojha
Maheswar Khatei
Gobardhan Jena
Govinda Chandra Patra
Kamal Kanta Samal
Amulya Kumar Kar
Ajay Kumar Kar
Sukadev Sayan
Jaya Krishna Ghadei
Basidhar Rout
Lochan Gochayat
Jaga Reddy
Siba Chandra
Mohapatra
Annapurna Mohanty
Subal Nayak
K. Parsuram Reddy
Gadadhar Mohananda
B. Swain
Karunakar Samal
Prasanta Kumar
Pattnaik
Rabin Narayan Nanda
267
199
201
208
271
224
261
225
260
270
268
227
265
19.01.11
27.08.10
28.08.10
28.08.10
20.01.11
29.09.10
11.01.11
29.09.10
11.01.11
20.01.11
19.01.11
29.09.10
15.01.11
300000
450000
380000
330000
300000
300000
330000
300000
330000
300000
300000
350000
350000
313344
417706
368297
285574
275834
276591
330433
273768
326692
288851
308764
348880
367508
13
6
8
5
6
1
6
6
8
9
11
63570
42700
45570
2155
22300
32280
4650
32280
29330
39120
48825
62760
266
269
264
262
263
222
223
19.09.10
19.01.11
15.01.11
15.01.11
15.01.11
31.01.11
31.01.11
300000
300000
300000
300000
300000
300000
300000
294825
316435
278671
284667
268701
291200
300438
8
12
1
1
9
11
39090
58680
5780
4880
41850
51150
229
04.10.10
300000
306728
13
60450
Irregular Finance to Employees of BSNL under Koraput Division: Branch has given
personal loans to 37 employees of BSNL. Prior to sanction of personal loan to employees of
BSNL the branch has not availed permission from the H.O. of the Bank as the headquarters
of DDO of BSNL is situated at Koraput. The details are given below:
Sl.
No.
1
2
3
4
5
6
7
8
9
10
Name of the Loanee
Suresh Ch. Nayak
A.M.Patra
Ghasiram Barik
Bijay Ku. Dey
Aias Mallick
Balaram Hansda
R.S.P.Rao
Manoj Ku. Pujari
Bijaya Ku. Jenamani
J.K. Pradhan
A/c
No.
388
380
389
390
417
413
415
398
480
507
Sanctioned
Amount
800000
800000
800000
800000
800000
750000
800000
800000
700000
750000
Balance as on
31.03.12
764870
762119
764563
764256
784343
735323
784343
766915
704352
749787
The Chief General Manager BSNL, Odisha is the controlling officer of all the
Divisions of BSNL Odisha. The General Manager (Finance) office of the
CGM, BSNL Odisha vide letter No. AP/OSCB/ Personal loan 2010 dated
27th January 2011 advised their all unit heads to extend the OSCB personal
loan facility to their interested staff as epr the terms and conditions of our
personal loan scheme. Basing upon the above circular of office of the Chief
General Manager, BSNL, Odisha. Chief Account Officer office of the GMTD,
BSNL Koraput has requested to our Branch to extend the loan facility to their
employees. Accordingly the Branch has sanctioned 37 personal loan to the
employees of Koraput Division amounting Rs. 228.90 lakh and regular
recovery is forthcoming. There is no overdue against any of the borrower.
34
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Mahendra Kumar Kamila
Bhubaneswar Suna
Kanhu Chandra Sethi
Guru Chanran Behera
Narahari Bhatra
Bijay Chandra Padhy
Padman Kumar Samanta
Nabin Chandra Pradhan
Apparao Hial
Sarat Chandra Nayak
Chitragupta Chhatrai
Tankadhar Karkara
ANPA soren
Ramchandra Behera
Madhu Nayak
D. Majhi
D Patra
Hemanta Kumar Nath
Asim Kumar Ray
Debasis Sahoo
N.K. Majhi
Mahadev Sahoo
Rabi Sahoo
Satya Narayan Panigrahi
D. Kumbar
Arjun Khiro
J. B. Harizan
TOTAL
377
382
394
378
414
372
399
416
381
406
383
410
403
401
396
400
409
379
397
391
373
384
479
481
505
506
519
750000
730000
600000
330000
550000
700000
350000
600000
540000
400000
600000
650000
800000
600000
600000
400000
350000
600000
570000
450000
800000
300000
500000
500000
600000
650000
570000
22890000
607386
674891
564380
367240
539238
659985
335391
578029
487192
386937
571124
638516
774177
574724
569775
383303
337904
571740
546412
434499
763675
285330
503108
503108
599829
649815
568189
22056768
LTNA 106 : SRI PRADEEP KUMAR SWAIN
 Signature of DDO not verified by either by the loan officer or by the BM in Annexure- I &
II of the loan application form.
 Irrevocable letter of undertaking is not filled up.
 Up to date salary certificate not obtained.
 Guarantor (Sri Gangadhar Nayak), who is a casual worker of the Archeological Survey
of India, but the branch has taken him as guarantor to the loan. This needs to be looked
into.




As per the verification certificate issued by H.O., Field Officer has
verified which is already in the loan file.
Irrevocable letter of under taking duly filed up.
The loanee has submitted the loan application on 16.03.10.
Accordingly he has submitted the salary slip for the month of
February 2010.
Sri Gangadhar Nayak, casual worker, who has stood the guarantor
for the loan availed by Sri P. K. Swain has become confirmed
employee
35
LTNA 115 : SRI DEBASHIS DHAL
Signature of DDO not verified by either by the loan officer or by the BM in Annexure- I & II of
the loan application form.
Up to date salary slip has not been produced by both loanee and guarantor.
As per verification certificate issued by the H.O. the Field Officer has verified
which is already in the file.
LTNA 118 : SRI DEBENDRA KUMAR NAYAK
Signature of DDO not verified.
Most of the documents are not filled up.
Guarantor identification proof not obtained.
Up to date salary slip not obtained.
Signature of the DDo is verified by the field officer with the acquittance
register of the loanee as epr the prescribed format issued by H.O.
The Branch has received the loan proposal during March 2010. The
borrower and guarantor have submitted their salary slip for the month of
Febraury 2010 and January 2010 respectively.
The related documents has been filed up and regularized.
Sri Lalatendu Mohanty who stood as the guarantor of Sri D. K. Nayak has
submitted his office I Card for proof of identification.
The loanee has submitted the up-to-date salary certificate.
LTNA 122 : SMT CH. SWARNA PRAVA PANDA
Signature of DDO not verified.
Most of the documents are not filled up.
Guarantor identification proof not obtained.
Up to date salary slip not obtained.
Signture of the DDO is verified by the field officer along with the acquittane
register as epr prescribed verification certificate issued by H.O.
Documents have been duly filled up.
Guarantor identification has been placed at P – 1 of loan file of Swarna
Prava Panda.
Borrower has submitted the loan application on 28.04.10 and the salary
certificate for the month of March 2010 has been submitted.
LTNA 124 : SRI RABINDRA KUMAR MOHANTY
Signature of DDO not verified.
Most of the documents are not filled up.
Guarantor identification proof not obtained.
Loan Expenditure Estimate not signed by the loanee
Signature of the DDO verified by the Field Officer with the acquittance
register as epr prescribed verification certificate issued by H.O.
Documents has been duly filled up
Guarantor identification obtained.
Loan expenditure statement has been signed by the Borrower.
36
MTNF 1369 : SRI BIJYA KUMAR NAYAK
Most of the documents are not filled up.
Guarantor identification proof not obtained
LIC Policy No.-587583537 kept in the file, but not assigned in favour of Bank (due date of
commencement of policy is 26.06.10 which is below 3 years).
KALINGA HOSPITAL CAMPUS BHUBANESWAR BRANCH
A/c No.
Name
Limit
Remarks
(in
Lacs)
CC-03
Kalinga Hospital Ltd.
80.00 Company common seal not affixed
in all the documents.
SAILASHREE VIHAR BHUBANESWAR BRANCH
LTNA-297
Manash Kumar Das
3.00 NJS is not affixed in Personal Loan
Agreement.
CC-01
Harimala Medical
1.50 Agreement of hypothecation &
Store
guarantee held, but not filled up and
NJS was not affixed.
LTNA-296
S.K. Nooruddin
4.50 NJS not affixed in the loan
agreement.
LTNA-322
Anil Kumar Giri
8.00 NJS not affixed in the loan
agreement.
ROURKELA BRANCH
CC-522
Sriya Computter
2.00 Hypothecation
Agreement
/
Guarantee Agreement, DP Note is
not filled up.
HBL-15
D. Hansda
4.00 The signature of guarantor in loan
agreement, guarantee agreement &
DP Note differs from each other.
The loan has been closed on 08.08.2012.
Complied
The Branch has already affixed the non-judicial stamp in case of CC -01,
LTNA 296, 297 & 322 and the Branch has informed the borrower and
guarantor to put their signature therein.
CC 522 – Sriya Computer hypothecation agreement, guarantor agreement
and DP note have been filled up.
HBL 15 – Sri Dhuma Hansdah fresh signature of the Guarantor Sri P.
Mohanty on the DP note has been obtained.
(iii) System of documentation in respect of joint/consortium advances:
On verification, it was observed that the Bank has not sanctioned any consortium/joint
advances during the year under audit.
37
(iv) Renewal of documents / Time–barred documents:
In case of Cash Credit Accounts, at the time of renewal when limit has been enhanced,
necessary documentation has been made. However, when the renewal has been made
without enhancing the limit, no fresh sanction letter has been issued and it is also observed
that the Time-Barred Document Register is not maintained. In the following cases the Cash
Credit Accounts are due for renewal but not yet renewed:
ASHOK NAGAR BRANCH
Sl.
No.
Accou
nt No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
6
8
9
11
16
19
20
22
28
34
37
39
44
49
50
53
54
101
104
20
21
111
114
22
23
24
25
115
116
117
123
Name of the Borrower
M/S UGRATARA ENTERPISERS
M/S NARAYAN ENTERPISERS
M/S HEALTH CURE
M/S MAA TARINI CLOTH STORE
SWOSTIK MIXTURE
SONY ENTERPRISERS
BEHERA CLOTH STORE
SWASTIK VERIETY STORE
RADHASYAM MISHRA
SETHY JAPANI
BEHERA UDAYANATH
DAS SRI KUMAR
BISWAL SANKAR
JENA KRUSHNA CHANDA
NARENDRA BRAJABANDHU
BEHERA BALABHADRA
BARIK MAKAR
BARIK ARUN KUMAR
SETHI SANKAR
M/S MAA BRABHUJA
COMMUNICATION
M/S BISWAMITRA TRAVELS
M/S INERPOLE SECURITY
SERVICE
M/S KALINGA ENGINEERING
M/S MAMATA TRAVELS
MAA SANTOSHI ENTERPRISERS
Limit
(in lacs)
O/s as on
31.03.12
1.00
5.00
2.00
0.05
1.00
1.80
1.50
0.25
5.00
0.15
0.15
0.25
0.25
0.15
0.15
0.15
0.25
0.50
0.15
255,239.00
278,123.96
1,163,146.56
11,391.00
20,960.66
68,133.00
200,761.00
30,697.98
392,106.00
34,733.00
19,822.00
52,416.00
19,153.00
28,498.00
28,498.00
16,559.00
33,029.00
14,674.00
29,123.00
0.25
0.80
48,080.00
35,717.00
1.00
2.00
0.70
0.10
44,851.00
187,345.52
66,089.25
12,784.00
Out of the 25 time barred / unrenewed cash credit accounts, one account
bearing No. C 28 of Radhashyam Mishra was renewed on 30.05.2012 and
the account is now operative. Other 24 accounts are still unrenewed as the
account holder are not interested to operate the limit. However the Branch
has initiated legal action against these defaulted loanees.
38
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
10
25
35
69
97
102
106
107
108
116
125
126
135
143
147
158
159
18
19
20
21
22
23
24
25
166
140
162
170
155
92
178
196
CHANDRASEKHARPUR BRANCH
SAROJ KU. PADHI
JATIN KU DAS
BIRANCHI NAYRAN NYAK
KALANDI KESHARI RAO
SEN SANATAN
RINKI DRESSES
SAHOO PRAVAKAR
DEEPAK DAS
BIKALI JENA
MANOJ KUMAR MAHAPATRA
SISR KU JENA
CHOUDHURY HARAPRASAD DAS
SUKANTA CHARAN SAHOO
KALYAN KUMAR GOCUK
SUKANTA KUMAR ROUT
DEBARAJ PRUSTY
PREMANANDA ROUT
RAMESH CHANDRA
CHOUDHURY
ALEKHA CHANDRA SAHOO
DEBRAJ PATTNAIK
AKSHYA KU JENA
S N PANDA
DURYODHAN SENAPATI
ANANDA CHANDRA MAHARANA
SHEIK ATAHAR
0.10
0.20
0.50
0.10
0.10
0.10
0.10
0.12
0.30
0.15
0.10
0.05
0.20
0.10
0.20
1.00
0.35
33,062.00
28,032.59
80,927.00
9,088.00
20,992.12
36,263.00
37,485.00
33,793.00
35,225.00
9,460.11
10,763.00
10,963.00
23,764.00
18,549.00
64,081.00
146,782.07
51,183.00
0.30
0.20
0.25
0.28
1.00
0.25
0.12
0.20
66,612.00
59,462.00
61,955.00
15,032.00
174,349.00
33,503.90
33,202.00
38,481.00
As regards of the 25 nos. of CC account mentioned in the audit report, we
have made all sort of correspondence for renewal of the same. Not a single
person has yet turned up so legal proceedings against the persons have
already been initiated. From the financial year 2012-13 we have maintained
the documents register and taking efforts to regularize the arrears.
39
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1
2
3
4
3
27
5
9
19
21
25
28
29
31
24
20
41
49
50
60
70
75
61
74
57
58
59
63
67
6
5
1016
1017
CUTTACK ROAD BRANCH
M/S B. T.V.
M/S MARUTI BUILDERS
BHANJA UDAYA
RELATION
SAHOO SANYASI CHARAN
M/S KANPUR LEATHER
SANITARYEMPORIUM
BHUBANESWAR TRADING CO.
BHUBANESWAR AUTO DISTRIBUTORS
CHOUDHURY STORE
HYDRO MECHANICAL SPARES SUPPLY
M/S TANIA HANDLOOMS
M/S NILACHAL DRY FOODS
M/S HOTEL SEBERA
DAS ENTERPRISES
LAXMI MEDICINE STORE
DAS MINATI
ASHUTOSH DRUG HOUSE
SAMANTRARAY SARATA
ORIPLUS COMPUTERS P.LTD.
JAGDEV MIHIR CHANDRA
ROUTRAY CHANDAN KUMAR
VARSHA DOORS AND VENEERS
MOHANTY SANTOSH PRIYA
JAY JAGANNATH STORE
LINK ROAD BRANCH
DASH ARUN KUMAR
M/S MATRUJYOTI BHANDAR
M/S OMM SITARAM EXCLUSIVE
M/S RASHMI HOTEL
5.00
5.00
0.25
0.25
0.10
1.00
5.00
5.00
5.00
0.50
0.40
1.00
1.00
1.20
0.25
0.50
0.25
0.50
0.50
1.00
0.25
0.50
0.75
0.50
1.00
0.35
2.00
0.25
0.25
907,160.00
748,872.27
47,189.00
66,971.00
7,520.00
201,542.75
665,426.30
995,568.00
761,721.25
119,151.12
70,958.50
154,938.70
24,318.04
105,343.00
22,247.00
37,439.00
22,480.00
24,679.00
28,645.00
64,920.03
3,198.00
559.00
74,825.00
36,616.00
70550
33,723.00
296,640.90
36,817.00
32,492.00
Dispute file
Dispute file
Dispute file
Dispute file
Legal notice issued
Dispute file
Dispute file
Dispute file
Dispute file
Dispute file
Dispute file
Dispute file
Legal notice issued
Dispute file
Legal notice issued
Dispute file
Legal notice issued
Dispute file
Dispute file
Legal notice issued
Legal notice issued
A/c closed on 31.07.12
Legal notice issued
Legal notice issued
Legal notice issued
Revival letter along with DP note etc. as prescribed by the Bank are
obtained from the account holder in case of renewal of accounts to take care
of the existing documents.
40
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1025
1029
1031
1013
1010
1038
1034
1022
1024
1026
1007
1012
1032
1014
1021
1018
1023
1039
1002
1004
1030
1
1
2
3
4
5
6
M/S MUBARAK DRESSES
M/S LIPU
DURGAMADHAB AUDIO & CD
M/S MAA TARINI STORE
M/S HEMALATA VANDAR
M/S R.K.FOOD
OMFED & TEA
M/S RAMASIVA FISH
M/S OM MAA S.B.STEEL
M/S CITY COLLECTION
PARIDA DILLIP KU
M/S LINK COMMUNICATION
M/S PRADHAN
M/S MAMUNI ENTERPRISERS
M/S MEERA MEDICINE
M/S STUDIO RAJKAMAL
M/S DEEPAK MATCHING CENTRE
SHREE GOPAL SAREE HOUSE
BEHERA PRASANTA KUMAR
M/S MANAS VERIETY
MAHAR SANAT
0.20
0.25
0.25
0.25
0.25
0.20
0.25
0.25
0.25
0.25
0.25
0.25
0.15
0.25
0.25
0.25
0.25
0.50
0.25
0.25
0.25
26,876.00
25,433.00
14,770.00
30,102.00
29,839.00
21,938.00
28,552.00
22,894.00
28,024.00
17,708.00
22,670.00
26,345.88
12,332.00
27,043.00
26,370.00
23,257.00
25,694.00
51,965.00
2,465.00
23,179.00
25,422.00
6
KALINGA HOSPITAL CAMPUS BRANCH
SUBHALAXMI CLOST STORE
1.25
125,669.00
11
18
15
21
19
33
SAMBALPUR BRANCH
M/S ANNAPURNA TRADING
SAMALESWARI SOFA SERVICE
MAA TARINI CLOTH STORE
VERMA MANISHA
SUBASINI TENT HOUSE
NATH ABHAYA
138,640.00
108,097.00
228,310.00
28,189.00
229,727.00
22,967.00
1.50
0.80
2.00
0.25
2.00
0.25
Except account No. 5 i.e. M/s Matrujyoti Bhandar, all the units were financed
under Swarojgar Credit Card for which it has not been possible for renewal
except one so far. In two such cases attempt is going on to convert in to
term loans.
Legal action has been intimated in 16 cases
The borrower is instructed to repay the exceed interest amount and to renew
the account.
All these accounts are NPA account and covered under legal action.
41
7
8
9
25
28
30
1
2
3
4
8
15
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
16
20
21
22
23
24
25
26
27
28
35
37
38
41
46
49
50
55
22
23
24
25
56
59
73
74
ASHOK KUMAR TRIPATHY
PRADIP KUMAR RATH
DILLIP KUMAR BOHIDAR
CUTTACK BRANCH
ODISHA TEXTILE MILLS LTD
M/S SHRADHA ENTERPRISERS
RAO A. GANGA
VARADWAJA VANIJYA
PRASTISTAN
M/S SARALA VERIETY STORE
M/S MUNA FOOT WARE
M/S JANAKI STORE
PRADHAN SIJARAJ
BEHERA NIRANJAN
NAYAK BANAMALI
SAHA SAPAN KUMAR
BEHERA KAILASH CHANDRA
M/S ROHINI LEATHERS WORKS
ILU GRAMENTS
M/S SONY SHOES
M/S SUMAN DRESS
M/S PRAKASH TEXTILE
M/S CITY GIRL
M/S LIBAAS
M/S SHIPRA GRAMENTS
M/S REAL TIMES
M/S MAHALAXMI FANCY
GARMENTS
M/S FASHION CITY
M/S MY CHOICE
TARINI VERIETY STORE
0.25
0.25
0.25
30,499.80
23,066.25
31,442.00
100.00
1.00
0.50
11,776,975.96
161,732.00
203,756.00
2.00
0.10
0.10
0.10
0.10
0.05
0.10
0.20
0.10
0.50
0.20
0.45
0.20
0.40
1.00
0.15
0.20
0.30
227,600.00
1,329.00
11,756.00
55,531.67
28,115.00
12,009.00
30,233.00
31,101.00
34,530.00
13,886.00
43,325.00
89,660.00
40,617.00
63,145.00
52,290.00
19,245.00
8,270.00
29,846.00
0.25
1.20
1.00
0.20
48,749.00
32,072.25
112,491.00
40,998.00
1. OTM is liquidated and bank has filed a legal action which is pending with
hon’ble High Court. The liquidator has assured to repay the outstanding
by disposal of fixed asset of that institution.
2. Now the borrower has deposited Rs.0.77 lakh and applied for OTS.
3. It is under covered under legal action and decree order obtained for EP
which is pending with ARCS, Cuttack.
4. Covered under legal action. Decree order obtained and pending for EP.
5. The outstanding balance is reduced upto Rs.329/- only which will be
closd very shortly.
6. Covered under legal dispute.
7. EP order obtained and pending with ARCS, Cuttack.
8. EP order obtained and pending with ARCS, Cuttack.
9. Decree order obtained and EP yet to be filed.
10. Covered under CD case No. 1555 / 2001.
11. Covered under legal action.
12. Covered under legal action.
13. EP to be executed .,
14. EP has been filed vide case No. 6/2008.
15. EP to be filed.
16. EP filed vide case No. 7/2008.
17. EP filed vide case No. 10./2008
18. EP is to filed
19. Covered under dispute vide CD case No. 233/2006
20. The balance has been reduced to Rs.8270/- which will be closed very
shortly.
21. It has been filed vide case No. 12/2008.
22. Legal action initiated.
23. Legal action initiated.
24. Legal action covered under CD case No. 55/2005
25. EP has been filed vide case No. 68/2006.
42
1
2
3
4
5
5
8
4
13
2
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
17
21
25
27
28
29
35
36
38
0.9
40
41
44
45
46
48
32
33
47
26
SAILASHREE VIHAR BRANCH
ROJA MEDICAL STORE
ANTIQUE GRANITE
MAHALAXMI STORE
B.M. ENGINEERING
PURNA CHANDRA BEHERA
MAA GIFT & OFFICE
STATIONARY
SOUBHAGYA KU PANDA
SASHIKANTA PARIDA
SHEELA MISHRA
NABAKISHORE PARIDA
REBATI PANDA
KARUNAKAR ROUT
SUBHASHREE RATH
SHANTILATA JENA
SRIDHAR OJHA
N SUBUDHI
SACHIKANTA DASH
ANURADHA NANDA
DEBASIS PANDA
BIBHU PRASAD MOHANTY
GYANA R. ROUT
SABITRI PHARMACEUTICALS
NARAYAN SAHOO
DHIRENDRA KUMAR BARIK
RASHMIKANTA BARIK
0.50
3.50
0.75
2.00
0.30
53,237.00
846,956.00
87,557.48
12,550.00
832.00
0.75
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
,091.00
2,800.00
10,560.00
15,216.00
6,733.00
10,777.00
3,091.00
16,706.00
20,085.00
23,350.00
15,627.00
22,173.00
18,663.00
27,969.00
30,859.00
17,229.69
147,920.00
14,106.00
11,027.00
25,146.00
The CC A/c which are due for renewal is not being renewed in spite of
several steps taken by the Branch. The branch has already communicated
the account holders to close the accounts as the finance was made under
the Swarojgar Credit Card Scheme.
43
1
2
3
4
5
6
7
8
9
10
10
17
23
28
84
106
146
151
152
191
11
12
198
220
13
14
15
16
17
18
19
20
21
22
221
268
248
267
294
315
368
330
244
316
SAHEEDNAGAR BRANCH
SANJIB DAS / M/S PALIKA
CHATURBHUJA SAHOO
MUKTA MANJARI SUTAR
KASHINATH SAHOO
ASIMA MOHANANDA
TRINATH FABRICATORS
M. PANDA / NATRAJ MIXTURE
GAURANGA CHANDRA SAHOO
BASANTA KUMAR PATI
BIREN KU. DASH / M/S SABITRI
RAMAKANTA RATH / MUNA
ENTERPRISES
GIRSH PRASAD MOHAPATRA
NAMITA PATTNAIK / TATINI ART &
CRAFT
SANGAM ELECTRICALS
PRAVAKAR MOHARAN
BIJAY KUMAR SAHOO / K. D. MILL
ADITYA MISHRA
RANJUSHREE DAS
LIPSA MOHANTY
MOHAPATRA BOOK STORE
OMM DEVI COMMUNICATION
HOTEL NISAN
24
29
35
38
62
ROURKELA BRANCH
DIVYA DRESS
A.B.GARMENTS
SAHOO STORE
MEGAZIN POINT
GOSIYA HLOO MAHAL
0.70
2.00
0.50
0.50
5.00
0.50
0.25
0.30
1.50
1.50
173,430.00
208,493.00
210,022.00
113,233.00
393,933.00
217,599.00
92,996.00
166,022.00
54,484.00
281,369.00
12.00
3.00
1,093,436.00
228,500.00
50
0.50
4.00
2.00
4.00
0.50
5.00
1.60
1.00
1.00
100,150.00
76,902.00
508,036.00
150,881.00
362,017.00
104,032.00
553,889.00
159,504.00
213,983.00
283,447.00
All the cash credit accounts bearing Sl. No. 1 to 22 as mentioned in the
Audit Reports were inoperative since long i.e. from the year 1994-95
onwards and classified as NPA. Most of them are overdue more than 10
years. It was not possible to renew all those NPA accounts. The expiry
period of all those accounts wire mentioned in our compliance made in Page
No. – I. Out of 135 nos. of cash credit accounts maintained by the branch as
on 31.03.12, 20 nos. of cash credit account were operative and renewed
within the operative period only.
As regards to issue of fresh sanction order for renewal of the limit without
enhancing the limit, it is clarified that the limit is renewed under that the limit
is renewed under existing terms and conditions for which separate sanction
letter was issued.
Date of expiry :1
2
3
4
5
1.50
1.50
2.00
2.00
0.85
145,034.00
152,890.00
92,210.00
242,169.00
98,714.00
05.08.11
01.01.12
15.01.11
23.11.11
09.08.11
44
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
88
115
122
152
163
212
223
261
251
335
398
417
524
530
550
573
627
634
746
HARAGOURI POULTRY FARM
JENA GOCERRY SHOP
NALINI STORE
KATHIYAWAD ROAD
J.K.VARIETY
PRAKASH TRAVELS
BEHERA TOUR & TRAVELS
SRIYA TELECOM
CONSTRUCTION
BIKAS ENTERPRISES
REENA STORE
FIRNGI HOTEL
CHOICE ANC CHOICE
NILAKANTHA STORE
BLESSING STORE
THE KNOWLEDGE LAMP
SHREE JAGANATH METAL
SINGH TRANSPORT
MAA MANGALA HARDWARE
1
2
3
4
5
6
7
8
9
10
34
174
188
129
57
150
15
36
22
24
PARADEEP BRANCH
ARROBINDA MEDICAL STORE
DALAI RAJENDRA KUMAR
PANDA BIMANENDU
SATPATHY SUDHANSU SEKHAR
S.K.ALLAM
SAHOO MANOJ KUMAR
MAJHI SUNANDA KUMAR
SAMANTARAY SANJAY
NASSIR HUSSAIN
KHUNTIA PURNA CHANDRA
0.75
1.15
1.90
2.00
0.65
2.00
2.00
1.20
1.80
1.50
1.21
0.80
1.90
0.90
1.50
7.30
1.00
1.50
2.00
73,343.00
178,027.00
195,807.00
350,548.00
74,506.00
228,164.00
206,721.00
110,997.00
192,980.00
207,644.00
135,120.00
84,944.00
218,890.00
112,495.00
181,255.00
76,565.00
113,367.00
126,057.00
170,698.00
13.01.11
23.07.09
12.12.09
21.09.10
22.09.09
20.07.10
18.12.10
01.09.10
06.08.10
21.09.10
23.12.10
16.10.10
13.10.10
12.08.10
18.08.10
10.10.10
01.04.11
13.02.12
09.01.11
All these accounts were overdue and inoperative since the date of expiry.
Brnach has initiated legal action against all accounts except CC 634.
0.15
0.035
0.10
0.25
0.33
0.27
0.50
0.23
0.15
0.44
39,767.00
5,210.00
45,690.00
188,228.00
45,698.00
54,124.00
123,996.00
22,748.00
25,483.00
66,212.00
In all the mentioned cases limits have not been renewed sicne 1995 to 1997
and legal action has been initiated against all the defaulted CC borrowers.
45
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
26
86
206
207
210
221
25
96
100
101
162
164
217
220
222
SAHOO DIPTI PRAKASH
SWAIN DILIP KUMAR
YAJJALA MASENU
PRADHAN SURENDRA NATH
BARIK PURNA CHANDRA
NAYAK ALEKH CHANDRA
MOHPATRA AKSHYA KUMAR
MOHANTY CHANDRA KANTA
DAS ASHOK KUMAR
BEHERA BENUDHAR
PATTNAIK SISR KUMAR
SAHOO PRAFULLA KUMAR
NAYAK RAMESH
SENAPATI ASWINI KUMAR
MUDULI SHESHADEV
3
4
6
7
10
11
12
13
15
16
17
18
20
21
26
31
32
ANUGUL BRANCH
MISHRA ENTERPRISES
PATTNAIK ASSOCIATES
M/S LITTLE
M/S MAMATA VARIETY STORE
MAA TARINI STORE CRUSHER
M/S OMM PHARMACEUTICALS
TARA ASSOCIATES
M/S SAAR INTERNATIONAL
M/S SRAVANI ELECTRONICS
M/S UTKAL FABRICATION
M/S BABA PHARMACEUTICALS
M.B. GRAPHICS
M/S MAA LAXMI SHOES HOUSE
M/S DASH INDUSTRIES
PANDIT MOTOTRS
M/S KOHINOOR AUTO
TRIPATHY ASHOK KUMAR
0.50
0.14
0.12
0.21
0.08
0.10
0.38
0.20
0.15
0.10
0.13
0.13
0.13
0.10
0.10
2.00
2.00
2.00
1.50
1.75
3.50
2.00
1.00
0.40
1.50
0.25
22.50
2.00
1.70
1.60
4.00
2.00
238,802.65
16,750.00
29,465.00
37,661.00
28,254.00
13,993.00
58,902.72
33,747.00
25,692.00
18,695.00
1,218.00
39,970.00
5,146.00
9,975.00
23,476.00
33,004.64
170,456.00
130,666.00
159,674.00
528,360.00
349,788.00
198,430.00
189,113.79
60,752.00
67,688.00
275.00
2,253,028.00
130,036.00
156,351.00
161,010.00
902,746.00
182,366.00
Branch has inssited the borrower to submit fresh loan application along with
relevant documents for renewal of the CC limits but they have not
responded positively. However they have been tken ample time to submit
necessary documents for renewal. Despite it Bank has been initiated legal
action againt them.
1. Demand notice has been served and partial amount is forthcoming.
2. Demand notice has been served and partial amount is forthcoming.
3. Decree in hand & particial amount forthcoming.
4. DC No. 322/09
5. DC No. 313/09
6. Demand notice issued & ready to initiate legal action
7. DC No. 198/06
8. DC No. 348/08
9. DC No. 197/06
10. DC No. 173/07
11. Closed on dt. 07.06.12
12. DC No. 281/10
13. 349/08 & 595/10
14. Borrower has submitted all documents & will be done shortly.
46
18
19
20
21
22
23
24
25
33
34
37
38
40
41
43
44
1
18
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
19
22
24
26
32
35
36
41
49
53
54
58
59
61
2
44
48
6
SAHOO LAMBODAR
CREATIVE DÉCOR
PRADHAN BIJULI
DAS BIJAY KUMAR
CYBER PLANET
STYLE SHOES
M/S KALYANI ENTERPISES
BARIK NARESH CHANDRA
BERHAMPUR BRANCH
M/S AMARDEEP ENTERPRISES
HINDUSTAN SPORTS AND
ENTERPRISES
PATRO S. DHARMA RAJU
PATTNAIK NIMAIN CHARAN
CHINIMINI APPAYA
MAHAPATRO SURYA
PANIGRAHI RAM KRISHNA
PATRO BUDHA
PATRO SUDAM
CHOUDHURY BHAGIRATHI
PATRO GOPAL KRISHNA
N. NARASINGH CHOUDHURY
PATNAIK PRASANTA KUMAR
BEHERA SIMANCHAL
HANDSOME MENS WEAR
RAO BASINA KRISHNA
M/S SANKAR STEEL
LAXMI GROCERIES
PRUSTY NARAYAN
2.00
1.70
2.00
2.00
2.00
2.00
1.20
1.50
266,051.00
153,268.99
260,019.00
98,160.00
205,154.00
260,553.00
12,455.00
60,246.00
0.50
25,573.00
0.70
2.00
0.20
0.40
0.80
0.90
2.00
0.10
2.00
0.50
2.00
0.20
0.50
2.00
0.50
2.00
2.00
0.125
85,350.00
112,829.00
24,643.00
33,802.00
48,447.00
100,367.00
253,892.00
12,311.00
129,803.00
60,695.00
148,937.00
24,280.00
55,642.00
233,269.00
63,134.00
229,941.00
222,955.00
13,739.00
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
DC No. 250/06
Closed on dt. 24.08.12
Demand notice has been served & partial amt. forthcoming
Closed on 28.09.12
D No. 764/09
DC No. 747/09
DC No. 728/09
DC No. 744/09
DC No. 518/09
DC No. 755/09
DC No. 514/09
Inspite of several reminders, borrowers are not responding. Hence Branch
has initiated legal action against 17 nos. of defaulted borrowers out of 25.
47
20
21
22
23
24
25
14
47
5
8
27
28
PANDA PRAKASH CH.
GOUDO BINOD
SAHU KUMAR
MAHARANA PRAKASH CH.
P. CHANDAN KUMAR
PATTNAIK SIVA PRASAD
0.50
2.00
0.25
0.11
2.00
1.00
25,382.00
260,788.00
17,737.00
14,391.00
276,238.00
36,445.00
Some Branches are not maintaining Document Register as a result of which they are
unable to establish and confirm the expiry period and release of documents in the cases of
closed loan accounts. Many agreements have been found incomplete.
(v)
Acknowledgement of debts
The Bank has been issuing sanction orders in duplicate in case of direct loans and
advances, the terms and conditions of which are acknowledged by the borrowing units.
Supervising Officers are instructed to look after this aspects.
(vi)
Custody of documents / System of keeping of the same
As per bank’s policy, all the original documents i.e. the security documents relating to
individual borrowers have to be kept in safe deposit locker, but it is observed that the some
branches were not following the rule rather they kept all the documents along with the loan
file.
The Supervising Officers are instructured to look into the matter and
comment in their visit reports.
(vii)
Maintenance of document register
Status of maintenance of document register of Branches and Loan Department at Head
Office are reported as under.
Sl. No.
1
2
3
4
5
6
7
8
9
10
11
Name of the Branch
Main Branch
Angul Branch
Sambalpur Branch
Rourkela Branch
Paradeep Branch
Berhampur Branch
Ashok Nagar Branch
Sailashree Vihar Branch
Saheed Nagar Branch
Cuttack Road Branch
Kalinga Hospital Campus Branch
Status of Maintenance
Maintained
Maintained
Not maintained
Maintained
Maintained
Maintained
Maintained
Maintained
Maintained
Maintained
Maintained
Now maintained
48
12
13
14
15
Chandrasekharpur Branch
Link Road, CTC Branch
Cuttack Branch
Head Office
Maintained
Maintained
Maintained
Maintained
4. Review / monitoring / supervision
i) Periodic balance confirmation
There is no system of periodical balance confirmation from borrowers. The bank issues
demand notices at the time of default in payment only.
ii) Receipt of regular information, Stock/Book Debt statements, Balance Sheet, etc.
During the course of audit of various branches, it has been observed that submissions of
stock statements by various borrowers having working capital limits are very irregular. The
stock statements are generally submitted at the time of renewal / enhancement of limits.
Further the DP registers are also not maintained and thus the drawing power is not
computed on monthly basis.
Supervising Officers are instructed to look into the matter and comment in
their monthly report.
a) In the following cases Stock Statements are not received regularly.
Branch Name
Main Branch
Link Road Branch
Cuttak Road
Branch
Berhampur Branch
Sambalpur Branch
CC Loan
A/c No.
565
321
Name of the Loanee
23
85
83
34
68
S.K. Mubark
M/s Rabindra Agencies
M/s Chandan Chanchala
Prop-Durga Madhab Satapathy
Vishnu Devi Box House
Bimala Motors
Bijay Kumar Pani
Chandra Muli Travel Point
Maa Sarala Auto Part
57
113
70
117
10
N S Mitu Auto Mobiles
Balaji Tent House
R P Graphics
N S Ashis Pharmacy Beutical
M/s S B Enterprisers
24
Main Br. – Stock statements have been received at the time of renewal.
Link Road - The Branhc will ensure to get th stock statement regularly
henceforth.
The borrowers are informed to submit stock statement in every mongh.
The Branch has intimated the loanee to submit the stock statement every
mongh.
49
b) Income Tax Return not held on record in the following cases:
CC Loan A/c
Branch Name
Name of the Loanee
No.
Link Road Cuttack
23
Vishnu Devi Box House
Branch
28
Radhashyam Meher
Ashok Nagar
Bhubaneswar
101130
Lingaraj Electrical & Electronics
Branch
100001
Sworna Hospital (P) Ltd.
192
Mayur Offset Printers
Chandrasekharpur
Bhubaneswar
472
Trupti Hardware & Paints
Branch
399
RND laboratories
83
Bijaya Kumar Pani
34
Chandra Muli Travel Point
42
M/s Shree Ganesh Hardware Store
44
M/s Jay Bajrang Traders
Cuttack Road
53
M/s S.K. Motors
Bhubaneswar
68
Maa Sarala Auto Parts
Branch
69
Maa Sarala Auto Parts
85
Bimala Motors
88
Rutu Auto Electrical
646
Laxmidhar Behera
321
M/s Rabindra Agencies
Main Branch
712
Ashrika Udyan
03
Bitarak Pvt. Ltd.
57
N S Mitu Auto Mobiles
70
R P Graphics
Berhampur Branch
113
Balaji Tent House
117
N S Ashis Pharmacy Beutical
Kalinga Hospital
03
Kalinga Hospital Ltd.
Campus Branch
25
Maa Sarda Electrical
Borrower has been intimated
All the borrowers are instructed to produce IT return in the next renewal.
Branch has approached to submit IT returns.
The Branch has informed the borrowers to produce IT returns at the time of
next renewal.
Main Br.
Complied
Branch has collected the Income Tax return for the financial year 2011-12
on 01.12.2012.
The Branch has asked the borrowers / proprietors M/s Maa Sarada
Electricals and M/s Maa Tarini Agencies to furnish the Income tax Returns
and balance Sheet as on 31.03.11 vide our letter No. 4205 dt.13.10.12 &
letter No. 4204 dt. 13.10.12 respectively by 15.11.12. Soon after receipt of
the documents from the borrows, the bank will be recorded in the respective
file.
50
Saheed Nagar
Bhubaneswar
Branch
382
Sailashree Vihar
Bhubaneswar
Branch
106
01
Prayaga Variety Store
Harimala Medical Store
10
38
03
M/s S B Enterprisers
M/s Mobile Samrat
M/s Guru Nanak Fancy Store
Bijayananda Co-operative Sugar Mills Ltd.
Baragarh Co-operative Sugar Mills Ltd.
Sambalpur Branch
Head Office
Maa Tarini Agencies
The borrowers are instructed to produce IT returns in their next renewal.
CC 10 - Letter issued for submission.
CC 38 - Letter issued for submission.
CC 3 - Letter issued for submission.
14992
c) In the following cases Balance Sheet as on 31st March’2011 not held on Record.
CC Loan A/c
Branch Name
Name of the Loanee
No.
Link Road
Bhubaneswar
23
Vishnu Devi Box House
Branch
28
Radhashyam Meher
Ashok Nagar
100203
M/s OSWAL
Bhubaneswar
Branch
101130
Lingaraj Electrical & Electronics
100001
Sworna Hospital (P) Ltd.
Chandrasekharp
ur Bhubaneswar
186
M/s Guru Mahima Cement Store
Branch
80
Aditya Medicine
82
Omm Satyam Sivam Traders
Cuttack Road
83
Bijaya Kumar Pani
Bhubaneswar
44
M/s Jay Bajrang Traders
Branch
68
Maa Sarala Auto Parts
69
Maa Sarala Auto Parts
88
Rutu Auto Electrical
Submitted IT return.
Financial statements including Balance Sheet has been collected and kept
in tile.
All the borrowers are instructed to produce balance sheet and PL account in
their next renewal.
CC 186 – We have requested the Proprietor to submit the updated balance
sheet.
CC 80, 82, 83 – We will ensure submission of the same at the time of
renewal.
CC 44 – Complied
CC 68, 69 & 88 – We will ensure submission of the same at the time of
renewal.
51
Main Branch
575
565
907
Ushman Fish Traders
S.K. Mubark
Maa Sunadei Electronics
Kalinga Hospital
Campus Branch
03
Kalinga Hospital Ltd.
25
382
Maa Sarda Electrical
Maa Tarini Agencies
4106
01
Prayaga Variety Store
Harimala Medical Store
10
35
38
03
14992
M/s S B Enterprisers
Amardeep Bohidar
M/s Mobile Samrat
M/s Guru Nanak Fancy Store
Baragarh Co-operative Sugar Mills Ltd.
Saheed Nagar
Bhubaneswar
Branch
Sailashree Vihar
Bhubaneswar
Branch
Sambalpur
Branch
Head Office
CC 575 has submitted the Balance Sheet and CC 907 has been intimated to
submit the same. CC 565 has been closed.
Balance Sheet as on 31.03.11 has been obtained.
Saheednagar – Maa Sarada Electricals and Maa Tarini Agencies have
been intimated vide letter No. 4204 smf 4205dt. 13.10.12 to submit the
balance sheet.
The borrowers are instructed to produce their Balane Sheet and PL a/c in
their next renewal.
CC 10 - Letter issued for submission.
CC 35 - Letter issued for submission.
CC 38 - Letter issued for submission.
CC 03 - Letter issued for submission.
This year they have produced the balance sheet at the time of renewal.
iii) System of scrutiny of the above information and follow-up by the bank to ensure
compliance with credit discipline.
Most of the branches have not covered all the defaulted loans under legal action. However
demand notice is sent to the borrower. The bank should initiate all possible steps to recover
the dues from the defaulting societies/borrowers.
The Recovery Cell of Head Office is taking initiative to cover all the defaulted
borrowers under legal action. Which is reviewed in every month in the
Branch Managers Meeting.
iv) System of periodic physical verification or inspection of stocks, equipments and
machineries and other securities.
 Godown physical inspection register has not been maintained by Branches as well as
Loan Department at Head Office level. It is suggested that the Bank should give
necessary instructions to all Branches and Loan Department of Head Office to
introduce physical inspection register immediately.
 The periodical inspection by branches and Loan Department of Head Office for big
borrowers should be done on monthly basis.
 During our verification to the branches it was observed that the branch has conducted
physical verification of stock, equipments, machineries and other securities
occasionally but neither it has been entered in the register nor proper noting has been
given in the respective loan files.
Supervising Officers are advised to look after this aspects.
Inspection has been done during the year of audit.
52

The Branch should give necessary instructions to the borrower (CC Account) to put
the signboard containing “stocks hypothecated to OSCB including name of the
Branch”.
v) Insurance cover for stocks and its adequacy-timely renewal of policies :
 Insurance cover register is neither maintained at branches nor at head office level.

In large number of cases, insurance coverage has been taken to the extent of loan
amount. It is suggested that the Bank should give necessary instruction to the
borrowers to have insurance coverage for entire stock but not to the extent of the
sanctioned limit. Detail of cases where either there is inadequate insurance or no
insurance are reported as below.
Branch Name
Link Road Branch
Ashok Nagar
Branch
CC Loan
A/c No.
24
23
27
29
40
100001
192
Chandrasekharpur
Branch
Cuttack Road
Branch
Main Branch
472
85
80
83
34
68
712
321
Name of the Loanee
M/s Chandan Chanchala
Prop-Durga Madhab Satapathy
Vishnu Devi Box House
M/s Rocky Developers & Promoters
Sun-X-Confectionery
Shyam Sunder Sen
Sworna Hospital (P) Ltd.
Mayur Offset Printers
Trupti Hardware & Paints
(N.B:- Insurance has expired on 22.01.12 but
renewed insurance copy not held on record)
Bimala Motors
Aditya Medicine
Bijaya Kumar Pani
Chandra Muli Travel Point
Maa Sarala Auto Parts
Ashrika Udyan
M/s Rabindra Agencies
(N.B:- Insurance Policy Expired 30.03.12, but
it has not renewed till date of verification)
CC 24, 23, 27, 29 & 40 - In all cases insurance have been made now to the
extent of whole stock.
However the borrower has been instructed to have insurane henceforth.
CC 192 - Assured to produce the insurance paper.
CC 472 – Submitted the insurance policy.
CC 85 - The borrows has travel business, so he has no stock to insured.
CC 80 & 83 - Customer is being informed to submit insurance certificate at
their next renewal.
CC 34 - The borrows has travel business, so he has no stock to insured.
CC 68- Customer is being informed to submit insurance certificate at their
next renewal
Main Br.
53
70
113
02
Bitarak Pvt. Ltd.
(N.B Insurance has been expired as on
30.03.12 but renewed copy not held on
record)
R P Graphics
Balaji Tent House
Prasanta Ku Nayak
25
382
4106
01
35
38
03
Maa Sarda Electrical
Maa Tarini Agencies
Prayaga Variety Store
Harimala Medical Store
Amardeep Bohidar
M/s Mobile Samrat
M/s Guru Nanak Fancy Store
322
Berhampur Branch
Kalinga Hospital
Campus Branch
Saheed Nagar
Branch
Sailashree Vihar
Branch
Sambalpur Branch
NOTE:- It is observed that Building Insurance has not been done in respect of Land &
Building taken as collateral security.
(i) Inspection reports of bank officials and follow-up thereon.
The Bank has a Department of Supervision, who prepares the programme for inspection /
supervision. The Department also monitors / follows – up the observations in the
supervision / inspection report. The Bank should put in place a fool-proof monitoring
mechanism for all types of loans and advances.
Complied
Branch has instructed the borrower to insure the stock.
Saheednagar Br.- Both the borrowers are intimated to submit insurance
papers by letter No. 4204 and 4205 dt. 13.10.2012 of the Branch.
The borrowers are intimated to produce insurance policies in their next
renewal.
Sambalpur Br. – CC 38 – Closed, CC 35 – Letter issued for submission,
CC 3 – Submitted.
Instruction has been issued to all Branhes to cover insurance in respect of
Land and Building taken as collateral security.
Department of Supervision is monitoring / following the observations of the
supervising officer / Inspecting Officers. The Bank has revised inspection /
supervision format covering all types of loans and advances viz. checking all
categories of loans sanctioned and NPA loans of the Branch during the
course of supervision / inspection.
(i)
Overall monitoring of advances through maturity/age/industry – wise analysis.
As observed the bank has been conducting monthly meetings of branch managers wherein
the loans and advances portfolio, overdue, NPA and their monitoring are discussed at
length and corrective actions have been initiated as and when necessary. Besides the
Managing Director himself has been making periodic review of the impaired advances and
legal action initiated to recover the dues loan wise. The Risk Management committee and
Audit Committee constituted by management of the bank have been also rendering this
aspect.
54
(ii)
Computation of DCB as on June every year as per guidelines of NABARD.
The Bank is conducting monthly review meetings of Branch Managers where by DCB
position of each and every branch is constantly followed up. In addition to that Bank is
also preparing the DCB as on March and June every year as per the guidelines
issued by NABARD. The DCB position for the year ending 31.03.12 is enclosed to the
report vide statement No. 6.
(a)
Agricultural loans (ST, MT and LT):
On verification it was observed that during the year the Bank is able to collect all
the demand amounting to Rs.212987.88 lakhs. The collection percentage is 100%
as against 100% last year. Besides this the Bank has also collected to the tune of
Rs.1600.00 lakhs in advance which shows the collection performance of the Bank
in terms of agricultural sector is satisfactory.
(b) LT loan to Storage Godown Project:
The collection of the Bank under this head comes to Rs.0.34 lakhs against the
total demand of Rs.645.06 lakhs which is overdue for last 2 years. Due to such
poor collection performance the overdue is increasing year after year.
(c)
Liquidated CS:
The loan outstanding under this head is Rs.77.83 lakhs which is fully overdue and this
amount is rolling from last 4 years. The collection performance of the Bank is Nil
against the total overdue.
Recovery Cell :- As against demand of Rs.645.06 lakh we have filed
dispute for recovery of IDA storage godown loan. The Bank has already got
decree against 27 nos. of marketing and Spinning Mills godown loan and
filed EP for attachment of godown and published it for sale of property and
recovery of godown loan. Now the recovery performance is increasing and
the demand has come down to Rs585.00 lakh.
However the Bank is going to invite OTS application from defaulting
societies, marketing societies and spinning mills for settlement of their loan
account in order to improve collection performance under LT loan to Storage
Godown scheme.
(5) Large Advances
Comments on (i) adverse feature in respect of large advances considered significant
and requiring management’s attention, (ii) Compliance with exposure norms relating
to advances as per the exposure norms stipulated by NABARD, RBI provisions of
Cooperative Societies Act. (iii) Review of large advances by the Board of Directors
and follow up action taken.
During the course of our audit, we have verified few large advances sanctioned / disbursed
during the year under audit and our observations thereon are listed below:
BIJAYANANDA CO-OPERATIVE SUGAR MILLS LTD.
The Borrower has been enjoying the following facilities with the bank:
55
(Amount in Lacs)
Sl.
Sanction
Sanction
O/s as on
No.
Loan A/c No.
Date
Amt.
31.03.12
CASH-CREDIT TO CO-OP INSTITUTIONS FOR OTHER PURPOSES
1 CC/CLEAN/14846
13.04.10
150.00
150.00
2 CC/HP/14976
31.12.11
33.60
33.60
TOTAL
183.60
CASH-CREDIT TO CO-OP INSTITUTIONS FOR
PROCESSING/PROCUREMENT
1 CC/PLEDGE/10135
31.12.11
1200.00
1193.73
TOTAL
1193.73
LT LOANS TO CO-OP INSTITUTIONS UNDER NON-AGRL. PURPOSE
1 LT/NA(RE)/14857
19.05.10
575.00
455.00
2 LT/NA(E&M)/15069
03.09.10
625.50
625.50
3 LT/NA(ID)/15407
29.03.11
150.00
150.00
4 LT/NA(E&M)/15691
19.09.11
135.00
135.00
5 LT/NA(E&M)/15731
11.10.11
20.33
20.33
6 LT/NA(E&M)/15766
11.11.11
53.17
53.17
TOTAL
1439.00
MT LOANS TO CO-OP INSTITUTIONS UNDER NON-AGRL. PURPOSE
1 MT/NA/12836
31.12.07
193.00
38.60
2 MT/NA/CONV/15205 11.01.11
76.00
38.00
TOTAL
76.60
ST LOANS TO CO-OP INSTITUTIONS FOR NON-AGRL.
1 ST/NA(CS)/15458
18.04.11
27.00
27.00
2 ST/NA(CS)/15462
17.05.11
120.00
120.00
3 ST/NA(CS)/15465
24.05.11
132.00
132.00
4 ST/NA(CS)/15483
07.06.11
183.00
183.00
5 ST/NA(CS)/15573
18.07.11
80.00
80.00
6 ST/NA(CS)/15619
04.08.11
65.00
65.00
7 ST/NA(CS)/15702
28.09.11
20.00
20.00
8 ST/NA(CS)/15747
28.10.11
139.00
139.00
9 ST/NA(CS)/15818
17.12.11
186.00
186.00
10 ST/NA(CS)/15882
30.01.12
85.00
85.00
11 ST/NA(CS)/16057
26.03.12
98.13
98.13
12 ST/NA(CS)/16098
31.03.12
139.00
139.00
TOTAL
1274.13
ST(BRIDGE) LOAN TO CO-OP INSTITUTIONS
56
1
BRIDGE/14579
31.12.11
TOTAL
GRAND TOTAL
200.00
200.00
200.00
4367.06
As per Sanction Letter No.-7680/11-12,Date-13.09.11, the limit i.e. ST (SAO) for Crop Loan
for cultivation of Sugarcane under tie-up arrangement with registered farmers has been
enhanced from 9crores to 15 crores. It is observed that the DP Note, Letter of Continuity
has been obtained in the letter pad of the Company instead of Banks approval documents.
This is very serious irregularity.
The Bijayananda Cooperative Sugar Mills Ltd. has availed different kinds of
loan limits on different purpose along with ST (SAO) limit against pledge of
their Land, Building and Plant & Mechanaries valued at Rs.51.69 crore and
have submitted loan-wise loan documents like D.P. Note, Letter of
Continuity, Loan Agreement etc. have been regularized.
Undertaking to shift the agricultural portfolio to the PACS affiliated to the Bolangir DCCB as
per Clause No.2 of Sanction Letter has net been complied by the borrower.
As regards undertaking to shift the agricultural portfolio to the PACS affiliated
to Bolangir DCCB, Bank had intimated to the Secretary of the CCB and
Bijayananda Cooperative Sugar Mills Ltd. time and again for necessary
action.
Full utilization certificate in respect of funds disbursed under term loan is not held on record.
Loan Agreement at the time of enhancement to 15 crores has not been obtained.
It is observed from the letter sent by HO to the company that the company is not arranging
for verification of farmer-wise loan ledger, farmer acknowledgements, ground level loan
outstanding against the farmers, etc. This need to be followed up regularly.
Process/ appraisal note not at all held on record.
The borrower is having accounts with PNB, Axis Bank (Bolangir & Nawarangpur), but the
Confidential Report from the said Banks not held on record.
TAX Audit report i.e. 3CB & 3CD not at all held on record.
Provisional Balance Sheet for the period 2011-12 not held on record.
Turnover in the CC Accounts does not commensurate with the limit fixed by the Bank.
Letter No.-6231, dt.-06.10.09, the Bank has written to NABARD for getting clearance in
respect of take over of restructured loan from UCO Bank, but it is observed that clearance
from NABARD was not available on record.
The mill had been continuously incurring losses and its accumulated losses stood at
Rs.619.90lakh as on 31st March’11. Despite this further disbursement has been made.
As against mis-utilization of funds the Bank had called for explanation to
refund the un-utilized fund to the Bank.
As advised the bank is persuing the matter with the borrower to obtain the
documents.
It is pertinent to mention here that due to provisions of the Odisha
Cooperative Societies Act and the constitution of the Management of the
Bank, it is only the borrowers, who are the owner of the Bank as share
holders. The Presidents of this Bank have been elected from among the
shareholders who are the borrowers of the Bank. In the past, most of the
members of the Managing Committee were elected from among the
Presidents of the DCCBs, but the last election had a peculiarity where the
DCCBs were mostly unrepresented and only the representatives of the nonagricultural societies came to the Board of Management. The Ex-President
of the Bank, Sri Jagneswar, who happened to be the Chairman of the
Bijayananda Cooperative Sugar Mills Ltd. was elected as the President of
the Bank and as such, headed all the Committees including the Loan
Committee of the Bank. This aspect was brought to his notice at the time of
sanction of loans in favour of BCSML but his reply was that when the past
Presidents representing the DCCBs were sanctioning the loans in favour of
the Central Cooperative Banks. As such, as President of the Bank, he
presided over the meetings.
57
The President of the Co-operative Sugar Mill, by virtue of being the President of the Bank
also had participated in all the Loan Committee Meetings wherein all loan proposals of the
Sugar Mill were discussed and approved. The Proceedings of various Loan Committee
Meetings were also issued under his signatures. He should have absent from participating
in all such Loan Committee discussions where in Loan proposals of BCML were discussed
in view of conflict of interest as per established governance procedures.
The term loans availed by the sugar mill from commercial banks as on 30.03.08 were
restructured as on 30th March’08 with the approval of NABARD subject to the condition that
the unit would prepare action plan for turning around and achieve 50% of crushing capacity
by the end of 2008-09, but the unit had not achieved this level even by the end of 2010-11.
The Sugar Mill had submitted a false utilization certificate of Rs.216.00 lakh towards three
loans sanctioned for infrastructure development of the mill which was verified by the
technical officer of the bank and reported that the mill had utilized only Rs.30.00 lakh out of
the released amount of Rs.150.00 lakh as on 10th May’11. In this regard a team of senior
officer of the bank headed by the CGM had visited the mill on 14.12.11 and confirmed the
facts reported by the technical officer. The bank had called explanation from the mill for
such false reporting of utilization on 22.02.12. Present status of the above said matter not
held on record.
The Bank had taken over loan from UCO Bank against the registered
mortgage of property of BCSML on 10th August 2010 and subsequently on
19.04.2010 covering the entire advances to Bijayananda Coop. Sugar Mills.
The market value of the said property is Rs.51.69 crore. It may be
appreciated that mortgage of property incorporates the charge creation and
it is more secured that a formal creation of charge and even though not
achieved the required target of sugar crushing by end of year 2011-12.
As regards Bridge loan of Rs.200.00 lakh and infrastructure loan of
Rs.223.00 lakh, the sugar mills have provided undated cheque value for the
same amount to the Bank. Due to default, Bank has presented the cheques
through clearing which was bounced and, therefore, this Bank has filed two
cases against the Chief Executive and Jagneswar, the then President of the
Sugar Mills in District Judge Court, Bhubaneswar which is under trial as per
Section 138 of N. I. Act. Further Dispute cases are being initiated for all
other loans against the Bijayananda Cooperative Sugar Mills Ltd.
It is observed that the Bridge Loan of Rs.150 lacs was sanctioned on 11.12.09 & it will be
repaid by 30.06.11 vide the letter on 29.06.10. Moreover vide letter no.4926, dt.31.08.10 the
bank has sanctioned additional Rs.50 lacs, total Rs.2 crores & extended the due date on
31.12.11, further it was extended on 30.06.12. The loan is extended time and again
disregarding the Prudential Norms of asset classification.
BARAGARH CO-OPERATIVE SUGAR MILLS LTD
OSCB sanctioned a CC Loan to Baragarh Coop. Sugar Mills Ltd of Rs. 5.00cr which has
been enhanced to Rs.10.00cr from 03.02.12.
The agreement for CC, DP Note, Pledge Deed and Letter of Continuity obtained in a plain
paper instead of Bank’s prescribed documents.
The CC limit sanctioned for the year 2012-13 in favour of Bargarh
Cooperative Sugar Mills Ltd. against which the D.P. Nore, Pledge deed and
loan agreement have been obtained as per legal opinion and also in the
prescribed format of Bank. The fresh insurance policy 2012-13 and audited
balance sheet as on 31.03.2010 has also been obtained. The limit fixed by
the Bank is based on projected turn over.
Burglary Policy not obtained by the Bank.
Audited Balance Sheet as on 31.03.09 is only held on record without any supporting
schedules.
Turnover in the account is not commensurate with the limit fixed by the bank.
58
(6) Foreign Exchange Bills
Foreign bills negotiated under letters of credit including pre and post shipment
credit, whether the debits and credits are permissible under the rules, whether
inward / outward remittances have been properly accounted for, adherence to the
guidelines issued by the RBI regarding the above operations, violations of FEMA, if
any.
The bank is not dealing with foreign exchange and as such the above clause is not
applicable.
(7) Coverage of crop loans under Crop Insurance
The following need to be examined:
(i) Whether all the loanee farmers and crops have been covered as per the
guidelines of Agricultural Insurance Company of India (AICI)
(ii) Whether premium is remitted to the insurance company in time
(iii) Amount of claims preferred
(iv) Amount of claims settled by AICI
(a)
of (iii) above those pending adjustment at the bank level
(b)
how much is adjusted to the loan accounts.
The Bank does not provide / disburse direct crop loans to farmers. The Bank provides
various types of agricultural loans to DCCBs and through DCCBs, the crop loans are
disbursed by the PACs affiliated to the respective DCCBs. As informed the crop loans
dispensed by PACs have been covered under crop insurance scheme and the premium has
been remitted by the DCCBs to the Agricultural Insurance Company of India. This is also
being monitored by the Bank through review in the state level monthly review meetings of
the Divisional Deputy Registrars of Cooperative Societies and the chief executive of the
DCCBs. And as such the claims preferred under the Insurance Scheme is not maintained at
the OSCB level. There has been no pendency for adjustment of indemnity at OSCB level.
All the loanee farmers and crops have been covered as per the guidelines of
Agricultural Insurance Company of India (AICI)
The CCbs are remitting the premium directly to the AICI within the stipulated
date as epr guidelines issued by AICI.
The claims are prepared by DCCBs directly.
The detailed information in this regard to adjustment of settled claims is
available at DCC level.
(8) Imbalances
Number of PACS with imbalances, imbalance in principal A.C. and interest A/c of the
DCCB, percentage of imbalances to total loans & advances outstanding. Reasons for
the same and likely impact on bank. Steps taken by the Bank to reduce imbalances.
The bank does not have any imbalance between its financing to the DDCBs and the
outstanding at the DCCS level. However, the imbalance exists at the DCCBs level. The
imbalance position under principal and interest account of the DCCB vrs PACs was not
59
available from the year 2006-07. The Bank should collect the data, compile the same and
take up periodical review of the situation to initiate corrective action to arrest the growth of
imbalance.
C. OTHER ASSETS
1)
Comment on the status of “other assets” including depreciation policy and
their valuation and provision made therefore.
(i)
The bank is providing / charging depreciation on various categories of Fixed
Assets at the rate prescribed by Auditor General Co-operative Societies,
Odisha vide Circular No. 2828/VI (I) 62 / 99(P-VI)-audit-8 dated 12.05.04
and the depreciation is charged on assets from the date of acquisition.
(ii)
The Fixed Assets of the Bank have not been revalued during the year and
the bank has a laid down procedure for annual verification of assets.
(iii)
The bank has insured the premises and Dead Stock articles against the risk
of fire / theft etc.
2)
Whether the Bank retained non-banking assets beyond the specified/
extended period and reasons therefor
The Bank has retained a piece of land at Chandrasekharpur area of Bhubaneswar
for the purpose of staff quarters. This land is not yet utilized as because of dispute
case pending at High Court of Odisha, Cuttack.
The land at Gopalpur, Dist.-Ganjam, Plot No.-HIG-8, Udaypur, Gopalpur on sea,
was purchased from Berhampur Development Authority for opening of a Branch.
As on date the bank has not constructed any building nor sold the said property.
The said property is more than seven years old.
2. Land at Bhubaneswar Sahar, Chandrasekharpur, Plot No. A/5 :- The
land was been acquired from the Government for construction of staff
quarters of the Bank. Due to unauthorized occupation of outsiders, the
Bank has not yet been able to vacant the same for construction of staff
quarters. A writ petition in the Hon’ble High Court is under trial. The land
will be used to construct the premises of the Agricultural Cooperative
Staff Training Institutte of the Bank.
Land at Gopalpur, Dist. Ganjam, Plot No. HIG-8 (USSG-HIG-32/96)
Udaypur, Gopalpur on Sea :- The Bank keeping in view for opening
one Branch of the Bank at Gopalpur-on-Sea had purchased one piece of
land measuring (40’-“ X 70’-0”) = 2800 sft. From Berhampur Deelopment
Authority on 30.09.1999. IN the meantime, all the big projects scheduled
to be installed in and around Gopalpur have been shelved. Bank is
pursuing with the Berhampur Development Authority to get the land
registered in favour of the Bank after which, the land will be disposed off.
D. NON-FUND BUSINESS
Policy, procedure, income, service charges covering lockers, safe deposit vaults,
Letter of Credits (LCs), Guarantees issued etc. and violations, if any, with reference
to guidelines issued by NABARD/ RBI on the subject
There is no violation of guidelines issued by NABARD/ RBI in connection with Non-Fund
business of the Bank.
60
E. APPLICATION OF PRUDENTIAL NORMS
Verify the adoption/application of Income Recognition, Assets Classification and
Provisioning norms by Cooperative banks as per the guidelines issued by RBI /
NABARD from time to time
The auditors must also issue a certificate to the effect that the implementation of the
prudential norms is satisfactory or otherwise and, the shortcomings, if any, should
be duly listed out.
The auditors are required to specifically comment on the following :
(I) Income recognition
(i)
Whether the bank recognized income as per instructions in vogue
(ii)
The total amount of income de-recognized (cumulative)
(iii) The amount of de-recognized income recovered during the year
(iv) The procedure followed by the bank for accounting de-recognized
income
The bank has duly followed the RBI/NABARD guidelines regarding Income Recognition
norms whereby interest has not been recognised in respect of those advance accounts
which have been declared as NPA.
The Bank has neither any system for computing the amount of income derecognized nor is
there any system for assessing the amount of derecognized income recovered during the
year.
Asset Classification
The following may be examined and commented upon.
(i) Whether the norms for Assets classification in respect of all assets and the
provisioning norms have been complied with by the Cooperative banks? If not,
the divergence observed in classification and the extent of provisions required.
The norms for Asset Classification in respect of all assets and the provisioning norms
have been complied by the Cooperative Bank. However, the asset classification in
respect of non-agricultural advance has been done account wise and not borrower
wise.
In cane be taken care of in the system on CBS implementation.
61
(ii)
Extent of NPAs, amount required to be provided for and the amount actually
provided for by the Cooperative banks.
The Bank is having a provision towards NPA as on 31.03.2012 amounting to
Rs.9615.00 lakhs. However, as per statement No.8 the financial statements show that
the Bank needs a provision of Rs.8584.79 lakhs as on 31.03.2012. As a result of
which, there is an excess provision of Rs.1030.21 lakhs towards Non Performing
Assets.
(2) Statutory Liquidity Ratio (SLR) / Cash Reserve Ratio (CRR) requirement system
of ensuring compliance :
Violations, if any in maintenance of CRR / SLR, details thereof and reasons for
the same.
The bank has not defaulted in maintenance of CRR and SLR during the year under
audit. But, it is observed that many times the Branches and Head Office are also
maintaining excess cash/ bank balance resulting in financial loss to the Bank.
4. Deposits :
Comment on as to whether bank has laid down norms / guidelines for conduct
and operation of inoperative accounts and violations, if any. Overdrawal if any,
and allowing drawals against unrealized cheque; delay in paying matured
deposits obtaining necessary declarations wherever required, comments on
adherence to KYC norms.
The Bank has not formulated a policy of its own with regard to inoperative accounts.
The Bank should formulate a policy in this regard on the basis of guidelines of
Reserve Bank of India and NABARD and follow the same.
The prescribed KYC norms are yet to be implemented with letter and spirit. The
existing computer system is not KYC compliant. Steps be taken to acquire a CBS
incorporating KYC norms. However, pending switching over to CBS, the KYC norms
may be followed by the Bank.
Whether there were any unusual large movements in aggregate deposits held by
H.O. / Branch at the year-end and window dressing.
Any unusual large movements in aggregate deposits held by H.O./ Branches at the
year end for the purpose of window dressing was not observed during the course of
audit.
Monitoring of cash and bank balance is done by General Manager (FAD) on
daily basis in order to check the idle cash balance with the Branches. In
some exceptional cases, due to late hour receipt of cash branches had to
maintain excess cash.
As per RBI guideline the bank have to put in place a board – approved
policy on classification of unclaimed deposits, grievance redressal
mechanism for quick resolution of complain, record keeping and periodic
review of such accounts. The Bank will approve the policy as soon as full
board is put in place.
It is a fact that share percentage of low cost deposits comprising Ccurrent
and Saving Accounts (CASA) in total deposit decline to 5.45% as on
31.03.12 from 6.59% in the same period last year. The net fall of CASA in
absolute term during the period under review is Rs.12.18 crore with total
obtained position reaching at Rs.215.68 crore as compared to like period at
Rs.227.86 crore. The segment-wise study at CASA reveals that Savings
Bank Account during FY’12 expended by Rs.2.53 crore to Rs.117.62 crore
from previous years obtained position. But there is negative growth in
current account to the extent of Rs.14.70 crore to Rs.98.05 crore as against
corresponding year ending position at Rs.112.76 crore. This did in current
account is attributed to decease of CC Banks outstanding to Rs.73.42 crorre
as compared to Rs.100.21 crore in the previous years corresponding period;
a fall of Rs.26.79 crore.
62
Whether the bank has correctly assessed the deposits for coverage under
insurance and whether premium is worked out correctly and remitted the same
timely.
As per DICGC policy, the bank has to correctly assess the total deposit position and
has to pay the premium to the DIGGC in two phases i.e. @ 5 paise per Rs. 100/- of
Assessable Deposits p.a. The Bank has paid insurance premium on dated 24.11.11
for the period from April,11 to September, 11 amounting to Rs.32,99,349/- on the
deposit of Rs.659.87 crores and Rs.34,38,772/- as premium on the deposit of
Rs.687.75 crores for the period from October, 11 to March, 2012 on 07.05.2012.
Comment on composition and the growth of deposits and the extent of low cost
deposits; new deposit schemes ;
(Rs. In lakhs)
Particulars
Position as on
Position as on
31.03.11
% to total
31.03.12
% to total
Current
11275.65
3.26
9805.18
2.48
Saving
11510.38
3.33
11762.92
2.97
Fixed
322752.50
93.41
373859.97
94.55
Total
345538.53
100.00
395428.07
100.00
As against the budgeted target of Rs.3850.00 crores set for the year 2011-12, the
Bank has achieved Rs.3954.28 crores in deposit, which is 103% of the approved
programme.
In FY’12 we have targeted to mop-up additional CASA of Rs.203 crore
through branch banking to reach nearer Rs.380.00 crore and to post a 10%
share of aggregate deposit. We extracted all pressure on our branches but
remain far short of target. There are two reasons of such scenario. Firstly
our all 14 branch outlets are situated in urban areas where we continue to
face cut throat competition with many Banks in operation and have the
customers are very very conscious that any saving account will carry
negative real interest in view of inflation. Reserve Bank of India has
prohibited us opening of branches outside the capital of State and because
of this directive Banks plan and programme to some branches outside
Bhubaneswar to mobilize low cost deposits has been made upside down the
second biggest hurdle. Non-availability of CBs platform and adoption other
advance technology to offer technology based products and innovative
delivery channel.
Despite all hurdles we are trying CASA growth by acquisition at new
accounts. We are also in advane stage of implementation CBS system in the
Bank. Two new technology base customer service like NEFT (national
Electronic Fund Transfer) and RTGS (Real time Gross Settlement Scheme)
have already entroduced. We are also stressing on establishing and
retaining multiple relationships with customers beside strategy of having
customer contact. Hopefully bank will witness substain CASA growth and
the share percentage would improve in FY’13.
It has also been observed that the low cost deposits consisting of current and
savings account was only 5.45% as on 31.03.12 as compared to 6.59% as on
31.03.2011. The Bank should sincerely endeavour to increase the low cost
deposit.
Opening and operation of FCNR and other non-resident accounts, whether the
debits and credits are permissible under the rules, whether inward / outward
remittance have been properly accounted for, ensure adherence to the
guidelines issued by RBI regarding the above operations, violations of FEMA, if
any. Irregularities if any, in repayment of deposits.
There is no non-resident deposit account in the Bank and as such the clause is not
applicable.
Whether the Bank reported the information as per Anti Money Laundering (AML)
guidelines.
Though the AML guidelines is not fully followed, however the Bank has submitted the
returns as noted below :
The Bank is regular in submitting CTR and STR reports.
63
CTR – April, 2011 to February, 2012 (Sent vide CTR – 914/ 10.05.12)
STR – July, 2012 (Sent vide STR – 3298/ 27.08.12)
(2) Manual on accounting policies; Accounting policies – their conformity with
Accounting Standards; time taken to finalize accounts; Any major
observations on branch returns and process of their consolidation in final
statements of accounts.
The Bank has not developed its own accounting manual but followed the basic
formats prescribed by RBI /Registrar of Cooperative Societies, Odisha / Auditor
General of Cooperative Societies, Odisha for maintenance of accounts.
Besides, the Bank has provided specific codes for various accounting heads
which has been approved by the Registrar of Cooperative Societies, Odisha and
the same has been duly followed by the Bank.
The bank has developed a compendium for reference of the branch officials.
The matter shall be solved at the time of CBS operations.
At the time of opening of accounts (deposit as well as loan accounts), the users
are not entering full phased data in the system, for which DCB statement, NPA
statements are not generated correctly. This aspect should be taken care so that
such type of mistake will not appear in the next audit.
(3) Compliance to disclosure norms
(4) House Keeping :
3. System of monitoring the position of balancing of General Ledger and other books /
including reconciliation of control and subsidiary records, whether the bank or
auditor has finalized the accounts :
The bank has a procedure for reconciling the general ledger vis-à-vis the subsidiary
ledgers of various account heads. But during the course of audit of various branches,
difference in subsidiary and general ledger balances were surfaced, the details of which
are mentioned below:
Un-reconciliation of Bank Accounts :
Branches
Main Branch
Cuttack Branch
Rourkela Branch
Name of the Bank
SBI, Treasury
State Bank of India
Canara Bank
Balance as per
Ledger
90877.28
793544.66
5000.00
Balance as per
Statement A/c
156544.28
787771.66
3300.00
Difference
65667.00
5773.00
1700.00
64
Un-Reconciliation Balance of Deposits:
Branches
Main Branch
Saheed
Nagar
Branch
Paradeep
Branch
Ashok Nagar
Branch
Particulars
FD Ind. & Others
RI Ind & Others
Recurring Ind & Others
Daily dep. A/c
SBD Ind. & Others
SBD CCB
SBI Coop. Inst.
CD Ind. & Others
CD CCB
CD Primary CB
CD Coop. Inst.
MFD
SD of Staff & Others
RI Indv./Others
SBD Indv./Others
CD Indv./Others
Recurring-Indi./Others
S.BDEPO.-Coop. Inst.
RI Indv./Others
Recurring Coop. Inst.
SBD Indv./Others
CD Indv./Others
48900767.73
3507368.76
Ledger
Balance as on
31.03.12
94573262.72
883315195.96
10804426
699713
239141275.50
33441.86
63852455.10
138397645.43
158427066.13
1915735.01
4941526.99
8400
237043.49
377718054
68610692.60
2258206.13
7160550
47318183.51
287242833
12
48750767.73
3277175.26
GL balance as
on 31.03.12
94568141.72
883043537.96
10789137.50
461633
239200271.03
18271.21
63827059.60
137226821.60
158268917.91
2133898.18
6402249.59
16080
247045.29
377667474
68303432.72
2142068.95
7160350
47327283.66
287252833
Difference
Remarks
5121
271658
15288.50
238080
58995.53
15170.65
25395.50
1170823.83
158148.22
218163.17
1460722.60
7680
10001.80
50580
307259.88
116137.18
200
9100
10000
12
150000
230193.50
Ledger Excess
Ledger Excess
Ledger Excess
Ledger Excess
GL Excess
Ledger Excess
Ledger Excess
Ledger Excess
Ledger Excess
GL Excess
GL Excess
GL Excess
GL Excess
GL Excess
GL Excess
GL Excess
GL Less
GL Excess
GL Excess
Ledger Excess
GL Excess
GL Excess
Kalinga
Hospital
Campus
Branch
Flexi Deposit
19786541.33
19802541.33
16000
Sailashree
Vihar Branch
FD Indv./ Others
RI Indv./ Others
SBD Indv./Others
59895958
1814875758
96061568.29
60596098
1814889258
96126726.14
700140
13500
65157.85
GL LESS
GL LESS
GL LESS
Cuttack
Branch
SBD Indv./Others
78832264.85
78851613.31
19348.46
GL LESS
The SB a/c balancing of Branches have been taken up by an
outside agency. The matter to engage outside agency for
reconciliation of SB A/c. is being taken up by H.O. for all the
accounts at branches.
GL Excess
65
Un-reconciliation Balance of Loans & Advances:
Branches
GL Balance as
on 31.03.12
886803.55
1267996.25
381192.70
Ledger Excess
1698959.69
1462603.45
236356.24
GL Excess
9222365
613414
68071208.58
129666567.20
3783115.73
627477
9396081.77
4127020
9148150.58
2725579
1751007.67
68195899.84
8883518
611914
68897955.20
129794723.20
3797109.73
665219.50
9137320.26
4143114
9144986.15
0732013
1721007.67
68042378
338847
1500
826746.62
128156
13994
37742.50
258761.51
16094
3164.43
6434
30000
153521.84
GL Excess
GL Excess
Ledger Excess
Ledger Excess
Ledger Excess
Ledger Excess
GL Excess
GL Less
GL Excess
GL Less
GL EXCESS
GL EXCESS
GL balance as
on 31.03.12
Ledger
Balance as on
31.03.12
Difference
Suspense
Payable A/c
1886787.45
703056.22
1183731.23
OB for Collection
1092091.95
1236394.76
144302.81
Particulars
CC Coop. Consumer
Business
CC Coop. Other
Purpose
OD Coop. Inst.
OD Ind. & Others
CC Ind. & Others
LAD
MTNA
LPOS
CC Indl. & Others
Loan Against Deposits
CC Loan(Ind & Others)
LAD
CC Indi. &Others
LAD
Main Branch
Saheed Nagar
Branch
Paradeep
Branch
Sailashree
Vihar Branch
Branches have started balancing of CC loan accounts.
Ledger
Balance as on
31.03.12
Difference
Remarks
Un-reconciliation of Other Accounts :
Branches
Main Branch
Particulars
Remarks
GL Excess
Ledger
Excess
The Bank should take steps to reconcile the accounts soon.
4.
5.
Un-Reconciled Balance of Bills/Drafts/Cherubs:
Branches
Particulars
No.
Main Branch
OBC
58
O/s amount
as per GL
1092091.95
Balance as
per Ledger
1236394.76
Difference
144302.81
Balancing to Drafts payable, DD paid without Advice, Bills payable, Periodical.
Generally the bank is carrying out the balancing of above items at periodical intervals.
66
6.
5.
Physical verification of security forms (Cheque Books, FDRs, DD, MT, etc.) and followup action.
The Head Office of the Bank has issued various security forms to all its branches and DCCBs
for which the Head Office has maintained up to date security register. During the course of
audit of various branches, security / stationery stock registers are properly maintained and
updated. Periodical physical verification of the security forms were carried out by the
Supervising Officers of the concerned Branches annually, hence physical verification should
be done quarterly.
Inter Branch Reconciliation :
Comments on the system / procedure and records maintained.
Reconciliation of inter branch account has generally been done at the Head Office. All the inter branch
transactions are made through Head Office. The unreconciled outstanding in the inter branch
reconciliation as on 31/03/2012 is Rs.2.50 crores as against Rs.14.80 crores of previous years, which
needs immediate reconciliation / adjustment.
Procedure followed for remittance of funds, TT discounting etc.
Generally all the branches in Bhubaneswar have been remitting their excess cash beyond the retention
limit physically to the Main Branch and the same has been utilized by the Main Branch for his own
requirement and excess if any is deposited with SBI, Bhubaneswar. But in case of other branches outside
Bhubaneswar, they are submitting the excess fund to SBI through Core Banking Service. After that the
main branch is remitting such fund to RBI Account maintained by H.O. through clearing. After which the
remittance of funds to various branches / CCBs / other State Coop. Banks under the free remittance
scheme of RBI through DD / TT / Core Banking services.
Test Check for any unusual entries put through inter-branch / head office accounts :
No such case was found during verification of inter branch reconciliation account.
Position of outstanding entries; system for locating long outstanding items of high value.
The reconciliation of the inter-branch account is required for eliminating the difference containing long
outstanding entries including items of high value.
Steps taken or to be taken for bringing the reconciliation up to date.
It has been observed that the unreconciled amount in the inter branch head has decreased to Rs.2.50
crore as on 31.03.2012 from Rs.14.80 crores of previous year i.e. 2010-11.
67
6. Inter Bank accounts Reconciliation :
Balances with other banks (including Apex Banks) – observations – on outstanding items in reconciliation
statements. Provision required for long pending unreconciled portion.
The Bank has been maintaining current accounts in various Commercial Banks, RBI and some of the other State
Coop. Banks. The reconciliation has been done on monthly basis and which have been duly reviewed by the
Managing Director. But while verifying reconciliation of current account maintained with other SCBs, it was
observed that a number of items are remaining un-Reconciled as mentioned below.
Name of the SCB
Uttar Pradesh State
Coop. Bank
West Bengal State
Coop. Bank
Tamil Nadu State
Coop. Bank
Particulars
Date
DD 246957 of MFD EC on Gorakhpur ZSB, Sadar Br., not
presented for Payment
DD 330471 of SAMBALPUR Br on ALIGAD Jilla Sahakari Bank, not
presented for payment
DD 246957 issued but not presented for payment
DD 267084 issued but not presented for payment
DD 184355 of JALESWAR BR., BALASORE DCCB issued on
AGRA BR. UP SCB, but not presented for payment.
DD 184356 of JALESWAR BR., BALASORE DCCB issued on
AGRA BR. UP SCB, but not presented for payment.
DD 743384 of OSCB SBP, issued on ALLIGARH JILA Sahakari
Bank, but not presented for payment.
O.D int. debited by West Bengal, SCB but not vouched by Odisha,
SCB
DD 33919 issued but not presented for payment
DD 32257 issued but not presented for payment
DD 84816 issued but not presented for payment
DD 84867 issued but not presented for payment
DD 105720 issued but not presented for payment
DD 105885 issued but not presented for payment
DD 105987 issued but not presented for payment
DD 70407 issued but not presented for payment
DD 110830 issued but not presented for payment
DD 126019 issued but not presented for payment
DD 354054 issued but not presented for payment
DD 110154 paid by West Bengal, SCB but not vouched by Odisha,
SCB
DD 344482 issued by MARKFED EC on TNSCB, but not presented
for payment.
27.11.98
Amount
(Rs.)
5000
03.02.00
24147
29.11.98
13.12.00
14.09.07
5000
10000
30000
16.09.07
30000
16.09.07
27825
31.03.01
5352
02.08.01
28.09.01
03.05.03
98000
5000
10000
44000
34818
3000
13000
15000
35000
10588
94610
35000
12.12.01
1350
Most of the long pending unreconciled entries relate
to DDs not presented for payment. SCB-wise
reconciliation has already been taken up and letters
have been sent to various SCB for submission of
required documents for reconciliation of accounts.
Reconciliation of current account with ICICI Bank (DD
Cell) has already been started.
68
Punjab State Coop.
Bank
Madhya Pradesh
State Coop. Bank
Jammu & Kashmir
State Coop. Bank
Himachal Pradesh
State Coop. Bank
Bihar State Coop.
Bank
Andhra Pradesh
State Coop. Bank
Delhi State Coop.
Bank
DD 330169 of SBP BR on Ferozpur CCB, but not presented for
payment
02.06.99
5000
DD 252882 issued by Main Br. on MPSCB, Gwalior Br., but not
presented for payment
Amount credited by J&K, SCB towards DD 085384, but note
vouched by Odisha, SCB
Amount credited by HP SCB, but not vouched by OSCB
Amount debited by HP SCB, but not vouched by OSCB
DD 330576 of SMB BR. on Bistupur Br. issued but not presented for
payment.
Differential balance between closing bal as on 31.03.01 & opening
bal as on 01.04.01 (2857886-2767886)
Amount Credited by Bihar SCB, but not vouched by OSCB
DD 500700 of RKL UCB on Bistupur Br. for Rs.50000/- cancelled by
OSCB on 31.08.01, but paid by the Bihar SCB.
DD 885505 of Keonjhar CCB on BSCB, Bistupur issued, but not
presented for payment.
DD 266373 issued by SN.BR on Durg Cub, Vijaywada not paid.
17.12.98
3000
12.12.02
25000
20.12.01
25.02.02
29.03.00
16020
20060
20000
DD 157563 of SN BR. debited by Delhi SCB, but not vouched by
OSCB
DD 32257 cancelled wrongly debited to Delhi SCB instead of
WBSCB in Banker’s Ledger
DD 246957 related to UP SCB
DD 168535 of MFD.EC cancelled by OSCB on 22.02.99, but paid by
Delhi SCB on 12.01.99
DD 236633 of Alaka EC paid by Delhi SCB on 11.07.01, but not
vouched by OSCB
Dd 250821 of SAMB.BR cancelled by OSCB on 16.05.00, but paid
by Delhi SCB on 05.06.00
DD 388401 pad by Delhi SCB on 11.07.01 but not vouched by
OSCB
DD 174055 issued but not presented for payment
DD 250578 issued but not presented for payment
DD 250614 issued but not presented for payment
DD 216425 issued but not presented for payment
DD 216433 issued but not presented for payment
DD 174142 issued but not presented for payment
DD 157706 issued but not presented for payment
DD 195699 issued but not presented for payment
DD 158153 issued but not presented for payment
90000
25.09.1
24.08.01
50000
100000
30.01.04
40000
27.02.99
30345
21.11.98
10000
23.10.98
5000
27.11.98
5000
21150
9970
20000
10000
31000
10000
9980
20000
10000
20000
25000
5000
10000
69
Maharashtra State
Coop. Bank
DD 342075 issued but not presented for payment
DD 236629 issued but not presented for payment
DD 439775 issued but not presented for payment
Amount Debited by Maharashtra, SCB but not vouched by OSCB
Interest debited by Maharashtra, SCB but not vouched by OSCB
DD 366739 of CSPUR Branch paid by them, but not vouched by
OSCB
DD 500113 cancelled by OSCB on 18.07.00, but paid by
Maharashtra SCB on 01.07.00
DD 500114 cancelled by OSCB on 18.07.00, but paid by
Maharashtra SCB on 01.07.00
DD 266577 cancelled by OSCB on 11.09.00, but paid by
Maharashtra SCB on 10.11.00
Amount debited by Maharashtra, SCB but not vouched by OSCB
DD 501053 cancelled by OSCB but paid by Maharashtra SCB on
25.11.02
DD 599803 debited by Maharashtra SCB, but not vouched by
OSCB
DD 360096 cancelled by OSCB on 28.08.01, but paid by
Maharashtra SCB on 12.05.01
Amount of Rs.112862350/- debited by Maharashtra SCB on
28.08.01, but vouched by OSCB on 28.08.01 as Rs.12861750/DD 354054 paid by Maharashtra SCB, but not vouched by OSCB
DD 296296 of Alaka EC paid by Maharashtra SCB on 24.01.02, but
not vouched by OSCB
Interest debited by Maharashtra SCB, but not vouched by OSCB
DD 435201 paid by Maharashtra SCB, but not vouched by OSCB.
DD 435202 paid by Maharashtra SCB, but not vouched by OSCB.
Amount credited by OSCB, but not accounted by Maharashtra SCB
Amount credited by OSCB, but not accounted by Maharashtra SCB
Interest on borrowing credited by OSCB (TMC), but not vouched
Maharashtra SCB
Amount credited by Maharashtra SCB towards proceeds of JDR
871354, but not vouched by OSCB
Amount credited by Maharashtra SCB for Rs.103225366.67 on
28.08.01, but vouched by OSCB on 28.08.01 as Rs.3225666.67.
DD 302410 issued, but not presented for payment
DD 302411 issued, but not presented for payment.
DD 133620 issued, but not presented for payment.
DD 350257 issued, but not presented for payment.
DD 599828 issued, but not presented for payment.
DD 266753 issued, but not presented for payment.
DD 302375 issued, but not presented for payment.
07.06.01
26.06.01
26.03.02
23.05.84
21.10.98
12.08.99
4908
9970
10000
5000
4383
10000
27.06.00
15000
27.06.00
10000
28.08.00
99800
13.11.00
23.11.00
76970008
29761
22.06.01
118000
23.04.01
23012
28.08.01
100000600
03.10.01
13.10.01
94610
13753
23.03.02
15.05.02
15.05.02
22.05.84
31.05.94
20.03.98
29345
10000
10000
65000
3914.16
4348
13.11.00
76978918
28.08.01
99999700
26.01.97
26.01.97
31.05.97
30.04.99
12.06.01
18.06.01
18.06.01
10000
5000
65000
10000
4000
100000
14000
70
DD 435050 issued, but not presented for payment.
DD 435049 issued, but not presented for payment.
DD 398879 issued, but not presented for payment.
Credited by Maharashtra SCB towards DFA, but not vouched by
OSCB.
Amount debited by OSCB (TMC), but not vouched by Maharashtra
SCB.
DD 528113 at Sl. No.364 wrongly ticked.
DD 528113 of SAMB. Branch on MSCB not presented for payment.
Credited by MSCB towards lending FDR
Debited by MSCB towards T.T (Advice dt.25.11.05 of MSCB is with
TMS of OSCB)
Debited by MSCB towards MUTUAL FUND (Advice of MSCB is with
TMC of OSCB)
Credited by MSCB towards T.T.
DD 62938 of Soro Branch BLS DCCB (150907) on MSCB not
presented for payment.
DD 62676 of Sadar Branch BLS DCCB (150902) on MSCB not
presented for payment.
DD 352828 of OSCB Main Branch (150101) on MSCB not
presented for payment.
DD 686263 not presented for payment.
17.01.02
17.01.02
06.03.02
28.02.03
10000
10000
9980
2849700
03.03.03
2850000
07.07.05
25.11.05
25.11.05
9977
9977
150000000
150000058
12.12.05
150436644
12.12.05
06.07.06
150430000
65892
24.05.06
3513
03.04.07
25000
10000
The Bank should take steps to reconcile the same soon. No provision has been made for long pending
items. However, reconciliation has not been made with ICICI Bank (DD Cell) Account.
7.
Suspense Accounts, Sundry Deposits, etc.
System of clearance of items debited / credited to these accounts :
7.
Suspense Payable
The bank has been maintaining suspense payable account in which generally contains the
payments to staff that includes security deposit, claim of staff regarding their retirement
claim, which could be paid only after their settlement. Similarly, it also contains payable to
others include security deposits; caution money, TDS payable, professional tax payable.
But, certain items are continuing since long which should be reconciled at the earliest.
There are some unusual entries kept in Suspense Payable, the details of which are given
below :
Head Office :
Particulars
Amount
Date
Interest received on excess
101161.42
31.03.99
Deibold System Pvt. Ltd.
20000.00
27.09.05
71
Dilip Interior (P) Ltd.
Harijan Tribal Welfare Department, Odisha

30404.00
34000.00
06.01.03
31.03.09
Suspense Recoverable (Others)
The following items are continuing since long without adjustment thereof :
Head Office :
Particulars
Continuing
since
31.03.99
31.03.99
13.01.05
31.03.99
31.03.99
31.03.99
31.03.99
Amount
Andhra Cement Ltd.
71,039.77
Biswanath Muduli, Nayagarh
88,825.91
Harihbakti & Company, Mumbai
2,62,500.00
IDC of Odisha, Bargarh
4,82,102.46
Odisha Cement, Rajgangpur
4,82,674.21
Secular Assemblers, BBSR
1,90,000.00
Steel Authority of India
4,66,174.24
Staff
Himanshu Sekar Das
31.03.99
2,40,756.00
T. S. Prasadh
31.03.99
1,57,790.60
Asis Ku. Das
13.01.03
2,91,361.21
Debasis Ray
63,422.00
Dibyasingh Panda (Ex-staff)
77,749.69
Suspense Recoverable outstanding amount comes to Rs.227.42 lakhs as on 31.03.2012 as
against Rs.225.09 lakh in previous year. Immediate steps may be taken to liquidate the staff
advances as well as other advances within a definite time frame.
Whereas, provision has been made for the items continuing for more than six years @100% but
no provision has been made in case of any amount recoverable from staff members.

Sundry Debtors :
The total amount shown under this head comes to Rs.20.80 lakhs as on 31.03.2012 as
compared to Rs.17.17 lakhs in previous year. External balance confirmation certificate
has not been obtained. Age-wise classification of Sundry Debtors has not been made.

Sundry Creditors :
The total amount shown under this head comes to Rs.147.28 lakhs as on 31.03.2012 as
compared to the previous year of Rs.147.38 lakhs. External balance confirmation
certificate has not been obtained. Age-wise classification of Sundry Creditors has not been
made.
At the time of construction of World Bank IDA Storage
Godowns under NCDC-I and III Project for different PACS /
LAMPCS / RCMS under the direct supervision of OSCB
Advance payments were made to Andhra Cement, IDC, OCL,
Steel Authority of India for supply of cement and M.S. Rods.
The companies have supplied materials. But after supply of
materials the final bill have not been adjusted against the
advances paid. It may be due to missing of the final bills.
After lapse of so many years the companies are also unable
to furnish the copies of final bills. So there is no other
alternative except to square-up the advances placing the
matter before the Managing Committee of the Bank. There is
funds available in Storage Project construction suspense
Account (Funds received from NCDC for constructionof
storage godowns) Although the projects have been
completed, due to non adjustment of materials and non
finalization of many work bills, funds received from NCDC is
still remaining unspent in storage project construction
suspense account. The amount outstanding against Sri
Biswanath Muduli, contractor due to non finalization of the
work bill. The amount outstanding against Secular
Assemblers, Bhubaneswar relating to the work doen by the
party in Paradeep Branch Building. Although the work bill has
been finalized perphs, due to oversight the amount has not
been adjusted. This will be verified and adjusted.
The advances against Sri H. S. Dash, T. S. Prasad and Assis
Kumar Das were paid for different works of the Bank and
(constructionof IDA Storage Godowns in case of H.S. Dash).
This outstanding are due to non finalization of pending bills of
the concerned works.
72
8. Long pending items in balance sheet and their position :
A list of long pending items in balance sheet may be examined and the measures taken by
the bank for squaring off the same.
During the course of audit, it is observed that there are certain items which are continuing as such
without adjustment in the balance sheets, the details of which are mentioned below : Heads of Accounts
Sundry Debtors (P&T Cell Account)
Sundry Creditors (Project A/c NCDC)
DD payable
Audit & Other Recoveries
D.D. Ex-Advice
Amount (Rs. in lakhs)
1.50
117.21
3.45
21.62
13.88
Dr
Cr
Cr
Dr
Dr
9. Branch Inspection :
System of branch inspections: frequency; scope / coverage of inspection; system of internal audit,
concurrent audit, revenue audit and reporting. Arrears, if any in inspections audit to be mentioned.

As a part of the internal control system, Bank has constituted the Department of Supervision (DoS)
to conduct monthly supervision, annul inspection of its Branches and DCCBs. The Bank has
programmed to inspect 5 nos. of DCCBs, out of which, 5 nos. of inspection have been completed.
But, no reports have been received so far.
Bank draws the Annual Inspection Programme in each year
during the month of September / October after the Audit of
the Bank is completed. During the year Bank has
programmed to conduct Annual Inspection of all Branches
and Bank has asked the Branches for submission of
compliance report.
Moreover, from the table given below, it is observed that the bank had conducted only 5 inspections
during the year 2009-10 & 12 inspections during the year 2010-11 out of 14 branches. It is observed
that the inspection for the year 2010-11 was conducted very lately. This indicates that the bank is not
showing seriousness for inspection of branches, resulting in mass irregularities in some of its
branches. Further it is also observed that, the bank is not in habit of scrutinizing any compliance
reports received from branches. Hence the bank should streamline its inspection department,
scrutinize the compliance reports summarize the major inspection findings & put up the same to CEO
/ Board for suitable action at their end.
Year
No. of Branches
Programmed
No. of
Inspection
Conducted
No. of
Inspection
Report Issued
No. of Compliance
Received from
Branches
2009-10
2010-11
14
14
5
12
5
10
5
6
Concurrent Auditors have been asked to give monthly reports
73




Concurrent Audit was carried out in all the 14 Branches of the Bank and Head Office. It is suggested
that the concurrent auditor should give monthly reports instead of on a yearly basis. Since lot of
irregularities have been found during statutory audit relating to documentation of various loan
accounts, monthly submission of concurrent audit reports will ensure expeditious rectification of the
irregularities.
No specific revenue leakage was detected in audit. In some cases, overdrawals were allowed
without charging necessary penal interest.
Compliance reports on concurrent audit of all 14 Branches should be prepared and furnished to
appropriate authority.
System of follow-up of these reports; position of compliance.
On receipt of inspection report, the officers of Department of Supervision verifies the defects /
irregularities. After receiving compliance again it is verified by Supervising Officers with the
comments in adverse / satisfactory under intimation to the person concerned for necessary
rectification of the record.
10. Management Information System
The efficacy of MIS maintained by the bank
All the statutory returns/reports were duly submitted by the Bank to the appropriate authorities within
the due dates in the prescribed proforma because of computerized operations and with the help of
MIS department. Even though the Bank uses two different software’s at Head Office and Branch level,
the MIS Department was able to provide information about the branch whenever the head office
needed.
and findings are discussed in Branch Managers Meeting for
rectification of defects.
In loan account specifically CC if by some reason the account
is marked as NPA then there will be no interest calculation.
During the time of collection posting if the transactions are not
marked as collection then NPA and ACB processing will be
affected.
Further while verifying some Accounts at Branches, we found that Interest has not been debited in
Standard Accounts. This aspect should be taken care by the MIS Department to rectify the Package
on Interest Calculation. Some of instances are given below:
Branch Name
Sailashree Vihar
Branch
Kalinga Hospital
Campus Branch
Loan A/c
No.
Name of the
Borrower
Limit
(in Rs.)
CC-30
M/s PBS Books
65000
CC-43
Rashmi Ranjan
Pradhan
100000
CC-5
Krishna Sanitary
35000
CC-7
Sriram Book Store
40000
Interest not debited in
the following Months
Oct.’11, Dec.’11 &
Jan.’12
Jan.’12
The Head Office has intimated above branches vide letter No.
3137 (4) dated 22.08.12 to update these loan a/cs and be
given a certificate stating that all loan accounts are upto date
in charging interest except NPA accounts.
May’11, June’11,
Sept.’11, Oct.’11,
Dec.’11, Feb.’12 &
Mar.’12
May’11, Dec.’11 &
Jan.’12
74
CC-11
Cuttack Road
Branch
CC-200042
CC-83
LAD-3995
OMFED Booth
Sri Ganesh Hardware
Store
Bijay Ku. Pani
Ajaya Ku. Sahoo
50000
Nov.’11, Dec.’11,
Jan.’12 & Feb.’12
750000
Aug.’11
200000
March’12
02.09.10 to 01.07.11
Ashok Nagar
CC-100183 Jyoti Sankar Mohanty
25000 April’11 to March’12
Branch
It is understood that the Bank is planning to switch over to the Core Banking Solution whereby all
the data required for submission of report and returns can be generated from the Data Center to
be maintained at Head Office level.
Comment on regularity of receipt of internal returns.
Bank has a system of reviewing monthly information received from the branches in prescribed
format. The same are complied at Head Office level and reviewed on monthly intervals in the
Branch Managers meetings.
Comment on content and regularity of submission of various statutory returns including
OSS returns and other external returns.
As per NABARD guidelines OSS return which include statement – 1, 2 and 4 are to be submitted
on quarterly basis. Similarly OSS returns relating to statement 1, 2, 3, 4 and 5 are to be
submitted annually. However, during the year under audit i.e. 2011-12, the OSS return for the
December, 2011 and March, 2012 (unaudited) were submitted in time.
The Bank is regular in submitting OSS returns to NABARD.
There is no pending upto September 2012 quarter as on
December 2012.
All the returns relating to CRR / SLR which is required to be submitted to RBI are regularly
submitted by the Bank.
12.
Risk Management System
Comment on risk Profile of the bank viz. Liquidity risk, credit risk, exposure risk, interest
rate risk and operational risk faced by bank supported by Ratio Analysis.
(a)
Liquidity Risk
An analysis of realizable value of assets and outside liabilities indicated that the realizable
value of assets at Rs.8,00,943.40 lakhs covered the entire outside liabilities at
Rs.7,65,004.95 lakhs as on the date of inspection. The liquid assets at Rs.3,00,575.20
lakhs had not covered the short term liabilities at Rs.3,52,174.37 lakhs as on 31.03.2012.
Further, the bank had not defaulted in maintenance of CRR during the period covered by
the present audit. The bank had also not defaulted in repayment of its dues to its higher
financing agencies. Hence, the bank was not exposed to long term and short-term liquidity
75
risks as on that date. The various ratios related to liquidity position of the bank as on
31.03.2012 were as under : Sl. No.
Particulars
Ratio as on
31.03.2012
01.
Individual deposits to total deposits
18.69%
02.
Individual deposits to total assets
9.08%
03.
Volatile deposits to total deposits
5.45%
04.
Volatile deposits to total assets
2.65%
05.
Net Loans to individual deposits
513.26%
06.
Liquid assets to short term liabilities
85.35%
(b)
Credit Risk
Following ratios disclose level of credit risk exposure of the bank as on 31st March, 2012.
(i) Ratio of impaired credit to total loans and advances at 5.85%
(ii) Ratio of doubtful assets to total loans and advances at 1.68%
(iii) Ratio of doubtful assets to impaired credit at 28.77%.
(iv) Ratio of loss assets to impaired credit at 0.09%.
The following factors had contributed to the present level of loan delinquency in the bank:
a)
There were high overdue against individual borrower’s particulars under Medium Term NonAgriculture Loans (MTNA).
b)
The State Government support towards recovery of loans was also not forthcoming to the
desired extent. Inadequate legal action would expose the bank to further credit risk.
c)
Non-realization of NPA loans extended to Government employees was also a matter of
concern.
In order to reduce the present level of loan delinquency, the
bank has taken the following steps.
a)
A recovery cell has been constituted in H.O. headed by
one senior officer in the grade of General Manager with
two Dy. General Managers. Special Recovery Drive
months are being observed from November 2012 to
March 2013 by the Branches at the instance of H.O.
Recovery squads have been formed at the Branch level
comprising Branch Manager and Field Officer who are
taking expeditious efforts for contacting the defaulters
and ensuring recovery. The officers of the Reovery Cell
of H.O. are monitoring the Recovery Squads at least 4
days in a week by visiting those branches and
associating them to contact the willful and hardcore
defaulters.
In addition to the above, they are also visiting the
organizations where the branches have financed to
their employees and contacting the concerned Drawing
and Disbursing Officers to deduct the Equated Momthly
Instalments (EMI) from the salary of the defaulted
employees.
Monthly progress on recovery of overdue loans during
the special Recovery Drive is being reviewed on
monthly basis in the meeting of the Branch Managers.
76
The bank has been able to collect the overdue loans to
the extent of Rs.233.14 lakh during the period from
November 2012 to January 2013 against the overdue
demand of Rs.1533.79 lakh in respect of 1371 nos. of
contacted borrowers.
b)
Recovery Cell of H.O. has also advised the Branch
Managers of all the Branches to cover all the ovedue
loans into legal action. Legal retainers have been
engaged by the branches to aid and advise the
Branches in respect of issue of pleader notice and filing
of disputes against the defaulters in the appropriate
court under Sec. 68 of OCS Act, 1962. On award of
decree in favour of the plaintiff, Executive Proceedings
are being filed by the branches before the concerned
Area Principal Officer-cum-ARCS.
c)
During the Special Recovery Drive conducted during
November 2012 to January 2013, special efforts has
been taken to contact the DDOs of Government
organizations for repayment of defaulted instalments of
their employes. As a result of which a sizeble amount is
forthcoming on that score.
(c)
Exposure Risk
The bank had not exceeded the exposure limits under unit-wise and sector-wise sanction of loans / limits
during the period covered by the present inspection. It had also not sanctioned any loans against share /
debentures to individuals. As regards investment, the bank had not invested in bonds of public sector
undertakings and in share/ debentures in secondary market. Thus, the bank had not violated any of the
exposure norms during the period covered.
(d)
Interest Rate Risk
It may be observed that the growth in gross interest income was in tandem with the interest expenses as
detailed hereunder:
[Rs. in lakhs]
Sl.
Item
31.03.2011
31.03.2012
No.
1
Interest income on loans
21584.10
25327.24
2
Interest income on investments
22039.94
26309.93
77
3
4
5
6
7
Gross interest income
Interest expenses on deposits
Interest expenses on borrowings
Gross interest expenses
Net Interest income
43624.04
27629.76
11837.73
39467.49
4156.55
51637.17
31952.61
13440.93
45393.54
6243.63
The net interest income of the bank had increased from Rs.4156.55 lakh as on 31.03.2011 to Rs.6243.63
Lakhs as on 31st March, 2012.
(e)
Market Risk
The bank’s investment formed 13.13% of the working funds as on 31.03.2012 as compared to 15.65% as
on 31.03.2011. As much as 99.92 % of the investments were in the form of low risk investment in
government securities. Thereby the bank had taken cautious approach in its investment decision to avoid
market risk arising out from market fluctuation in the pricing of shares and debentures.
(f)
Operational Risk
The internal checks and control system in the bank needs much improvement as several deficiencies were
noticed under different portfolios like loans and advances, deposits, house keeping etc. The bank had to
implement the system of monthly balancing of books of accounts and monthly reconciliation of current
accounts maintained with other banks.
The bank has alredy started initiative measures to improve
operational deficiencies. After implemention of CBS there will
be more such improvements.
13. Asset liability Management system.
Comment on the ALM Mechanism put in place by the bank. Comment on the gaps / mismatches,
analysis and generation of reports.
The Bank is yet to introduce Asset Liability Management system.
The matter will be taken up after CBS is joint in place.
14.
Vigilance Arrangements
i)
Implementation of Vigilance guidelines and systems as per guidelines of NABARD –
Working of Vigilance.
The Bank has constituted a Vigilance Cell as per the instruction of State Government. The
General Manager (Principal, ACSTI) is in-charge of the Cell and acting as the Chief
Vigilance Officer.
ii)
The Genreal Manager (GAD) has been designated as Chief
Vigilance Officer in plae of Prinipal, ACSTI vide order No.
OSCB/GAD/5674 dt. 08.12.12.
Irregularities / inadequacies in the vigilance arrangements
The Bank may consider entrusting the duties to one exclusive senior officer without
assigning any other duties to the officer concerned.
78
VII COMPLIANCE
Functioning of Audit Committee of Board System for taking timely follow-up action on the
observations and suggestions made in the inspection reports of NABARD, statutory auditors and
those submitted by the Internal Inspection Department, Vigilance Cell and internal auditors;
including Concurrent Auditor, timeliness and effectiveness of timely follow-up action on
guidelines, circulars, etc. issued by NABARD / RBI ; overseeing and providing direction as also
discharge of other duties / responsibilities may be commented upon.
Management of the Bank has constituted the Audit Committee on 09.04.2008 under the Chairmanship of
Sri S. N. Pattanaik, wherein a professional Chartered Accountant namely Sri Kulamani Tripathy has been
inducted as a member. But, this Committee is not functioning, as there is no existence of Board.
Comment on compliance with important provisions of the B.R. Act., 1949 (AACS), BR Act., 1934
and provisions of State Cooperative Societies Act and bye-laws.
d)
Compliance with the provision of Section 9 of the B.R Act, 1994 (AACS).
1. The bank has acquired a piece of land in the year 1985 at Chandrasekharpur from BDA.
However, the bank has not taken the necessary possession of the land and a legal case is
pending at Hon’ble High Court, Cuttack. The bank has not made necessary disclosure towards
non-banking assets in the requisite annual RBI return, thus violating the provisions of section 9
of the B. R. Act, 1949 (AACS), Further, the annual statement on Non-Banking Asset as
furnished to RBI did not incorporate the details of the said property. Apart from that for any nonbanking asset in the nature of immovable property held for more than 7 years, necessary prior
permission is to be obtained from RBI. Such prior permission has not yet been obtained though
the bank has applied to RBI for necessary permission vide letter no. OSCB/ GAD/ 2086/ 201011 dated 21.06.10. Further no improvement has been noticed during the period of our Audit.
2. The land at Gopalpur, Dist.-Ganjam, Plot No.-HIG-8, Udaypur, Gopalpur on sea, was purchased
from Berhampur Development Authority for opening of a Branch. As on date the bank has not
constructed any building nor sold the said property. Although the said property is more than
seven years old, this fact has not been intimated to RBI Violating section 9.
3. The Bank has acquired a piece of land at Cuttack towards settlement of outstanding dues against
The Odisha State Power Loom Service Cooperative Society. It is understood that Link Road
Branch of the Bank has submitted a building plan to the Cuttack Development Authority for
approval. Which is under consideration at Cuttack Development Authority.
As pointed out the Bank has already applied to RBI and
permission from RBI is awaited.
79
e)
Compliance with the provisions of Section 11(1) of the B.R. Act., 1949 (AACS)/ Section 42 (6)
(a) (i) of RBI Act., 1934
The aggregate value of paid up share capital and reserves stood at Rs.440.54 crores as on 31st
March, 2012. As such, the bank had complied with the provisions of Section 11(1) of the B.R. Act,
1949 (AACS). The bank had also complied with the provisions of Section 42 (6) (a) (i) of RBI Act,
1934 as on 31st March, 2012.
f)
Compliance with the provisions of Section 18(1) of the B.R. Act., 1949 (AACS)/ 42 (1) of the
RBI Act., 1934
The bank has maintained the required minimum cash reserve ratio (CRR) during the period covered
under audit.
g)
Compliance with the provisions of Section 19 of the B. R. Act, 1949 (AACS).
In contravention to the provision of section 19 of the B.R. Act, 1949 (AACS), the bank has not retired
shares amounting to Rs.13.00 lakhs held in other cooperative institutions.
h)
Compliance with the provisions of Section 20 of the B. R. Act, 1949 (AACS).
Restriction on Loans & Advances has not been complied by the bank.
i)
Compliance with the provisions of Section 22(3) (a) of the B.R. Act. 1949 (AACS).
The realizable value of assets was more than the total outside liabilities as on 31st March, 2012 and
thus comply the above provision.
j)
Compliance with the provisions of Section 22(3) (b) of the B.R. Act, 1949 (AACS) / 42 (6) (a)
(ii) of RBI Act, 1934.
The methods of operations of the bank are not detrimental to the interest of the depositors / bank
and thus comply with the above provision.
The General Body of the Bank has approved write off of the
shares amounting to Rs.13.00 lakh held by Cooperative
Institutions since the institutions have been liquidated and
there was no possibility of retirement of the same. The
Auditor General, Cooperative Societies, Odisha was moved
by the Bank vide letter No. OSCB/TMC/1624/2011-12 dated
17.06.11 to accord approval for writing off the asset under
Rule 65 of the OCS Rules, 1965. However, till date, the Bank
has not obtained necessary approval for writing off of the
same. As per the extant provisions of the statute, the Bank
can not write off the assets without approval of the statutory
authorities and, therefore, the accounting entries with regard
to write off the shares are yet to be passed. The matter has
been intimated to the Reserve Bank of India, Regional Office,
Bhubaneswar and the Bank is still pursuing with the AGCS,
Odisha after making cent percent provision in the Banks of
Accounts for these shares.
It is pertinent to mention here that due to provisions of the
Odisha Cooperative Societies Act and the constitution of the
Management of the Bank, it is only the borrowers, who are
the owner of the Bank as share holders. The Presidents of
this Bank have been elected from among the shareholders
who are the borrowers of the Bank. In the past, most of the
members of the Managing Committee were elected from
among the Presidents of the DCCBs, but the last election had
a peculiarity where the DCCBs were mostly unrepresented
and only the representatives of the non-agricultural societies
came to the Board of Management. The Ex-President of the
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k)
Compliance with the provisions of Section 24 of the B.R. Act., 1949 (AACS).
The bank has maintained statutory liquidity ratio during the period complying with the provisions of
Section 24 of the Banking Regulation Act, 1949 (AACS).
l)
Compliance with the provisions of Section 26 of the B.R. Act., 1949 (AACS).
Return of unclaimed deposit is not complied by the bank, as the Bank had submitted the return in
late.
m) Compliance with the provisions of Section 35 (A) of the B.R. Act., 1949 (AACS).
The bank had followed the system of monitoring high value and suspicious transaction as per the
instructions on KYC – Anti – Money Laundering Standards issued by RBI under Section 35 (A) of
the B. R. Act, 1949 (AACS).
Bank, Sri Jagneswar, who happened to be the Chairman of
the Bijayananda Cooperative Sugar Mills Ltd. was elected as
the President of the Bank and as such, headed all the
Committees including the Loan Committee of the Bank. This
aspect was brought to his notice at the time of sanction of
loans in favour of BCSML but his reply was that when the
past Presidents representing the DCCBs were sanctioning
the loans in favour of the Central Cooperative Banks, there is
nothing wrong if the presides over the meetings when the
loan in favour of BCSML were considered.
Returns are now submitted regularly.
The asset classification in respect of non-agricultural advance has been done account wise and not
borrower wise. Thus, it had violated the provision of Section 35(A) of the B. R. Act, 1949 (AACS).
n)
Compliance with the provisions of other Sections of the B. R. Act, 1949 (AACS).
The bank complied with the provisions of other important sections of the B.R. Act., 1949 (AACS) like
Sections 6, 8, 27, 29 and 31.
o)
Compliance to IT Act and other laws in force.
The Bank has submitted returns in form no.26QA and 26QAA as per Income Tax Rules, 1962 in
late.
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