For a banking sector, composite system / software which handles transactions, customer relations, regulatory compliances, MIS/ reports request is the need of the hour. Core Banking Systems (CBS) provide the solution for the same. There are number of Core Banking Software’s available in the market. More prominent and used in India are FINACLE, FLEXCUBE and BaNCS.
BaNCS Financial Package is for Banking Solution offered by Tata Consulting Services (TCS) . The Core Banking solution BaNCS is an integrated solution that automates all aspects of core banking operations across entities, languages and currencies. BaNCS is built on open architecture, component-based product suite to leverage service-oriented and event-driven architectures. Its functionalities includes the Entire range of banking products including savings, checking, overdraft and deposit accounts, Entire range of lending products, Complement of transactional services including remittance, foreign exchange, cards and trade finance, Accessibility through multiple channels, including mobile banking and web, Full integration of front-, middle-, and back-office processes, Accurate, timely and actionable information about customer relations, Single view between bank and customer and “Anytime anywhere” banking. This Financial Package is a popular core banking platform across the world. BaNCS is used by over 280 institutions in more than 80 countries. In India, State Bank of India, Allahabad Bank, Bank of Maharashtra, Central Bank of India , Indian Bank are such banks that use BaNCS Software Packages.
BaNCS OVERVIEW
1. Tran ID, Journal No. and Date
Under BaNCS the transaction number is known as Journal Number.
2. Customer Master Level Configurations
Under BaNCS the customer master details can be reviewed through “Customer Master Details” module.
3. Pointing Type Accounts / Self Reconciling Accounts
Under BaNCS, the outstanding entries are available through offline reports viz. “Audit BGL accounts age wise break up“ and “GL-Outstanding-Accnts” report.
4. Inventory Location
Under BaNCS the set of reports can be generated through VPIS (Valuable Paper Inventory System)
5. Accounts, Customer Master and Inquiry
| CBS Package | Menu Code / Access path | Menu Name | Menu Type (Inquiry
/ Report) |
| BaNCS | Customer Management -> Enquiries -> Search by CIF Number | To verify all accounts of one Customer | Inquiry |
| BaNCS | Customer Management -> Enquiries -> Search by ID Number | Search using available information (ID Number) | Inquiry |
| BaNCS | Customer Management -> Enquiries -> Search by Name | Search using available information (Name) | Inquiry |
| BaNCS | Customer Management ->Relationship / Ownership -> Associated Accounts | Inquiry on Linked Accounts, Owned Accounts etc. | Inquiry |
6. Transactions
| BaNCS | Deposit / CC / OD Accounts & Services -> Enquiries -> Transaction | Transaction Enquiry
(Additional options available: Transaction Types: 99 – All Financial, 98 – Cash Transaction, 25 – Repayment Details, 33 – Message Details |
Inquiry |
| BaNCS | -> Branch Accounting (BGL)
-> Enquire -> Transaction |
BGL Transaction Enquiry | Inquiry |
| BaNCS | Collection and Cheque Purchase -> Enquiries ->
Enquiries |
Inquiry for Cheque Purchase / on Collection | Inquiry |
7. Clearing Transaction
| BaNCS | Collection and Cheque Purchase -> Enquiries ->
Enquiries |
Inquiry for Cheque Purchase / on Collection | Inquiry |
8. Office Accounts Maintenance
| BaNCS | -> Branch Accounting (BGL)
-> Enquire -> Account |
Enquiry on BGL Account | Inquiry |
| BaNCS | -> Branch Accounting (BGL)
-> Enquire -> Account Number Search |
Search an Account Number by BGL Name | Inquiry |
| BaNCS | -> Branch Accounting (BGL)
-> Enquire -> Transaction |
BGL Transaction Enquiry | Inquiry |
9. Loans & Advances
| BaNCS | Deposit / CC / OD Accounts & Services -> Enquiries ->
Deposit / CC / OD Account |
To verify the Account Master Details | Inquiry |
| BaNCS | Deposit / CC / OD Accounts & Services -> Enquiries ->
Statement Print |
Printing Statement of Account for a Deposit or CC / OD | Report |
| BaNCS | Deposit / CC / OD Accounts & Services -> Enquiries ->
Short |
Basic details on Enquiry on Screen on Deposit Accounts | Inquiry |
| BaNCS | Deposit / CC / OD Accounts & Services -> Enquiries ->
Long |
Additional Details on Enquiry Screen for Deposit Accounts | Inquiry |
| BaNCS | Deposit / CC / OD Accounts
& Services ->Interest Rate History |
Details of changes in Interest Rate for an account | Inquiry |
| BaNCS | -> DL/TL Accounts &
Services -> Loan Tracking -> Operations |
Loan account operations | Inquiry |
| BaNCS | -> DL/TL Accounts & Services -> Loan Processing
-> Generate Repayment Schedules ->Action – “E” |
To print Repayment schedule for a DL / TL Account | Report |
| BaNCS | -> DL/TL Accounts & Services -> Enquiries -> Short -> Option “Balance Breakup Enquiry” | To view amount of Arrears & Breakup of Principal, Interest Realized, Charges & Arrear of Interest | Inquiry |
| BaNCS | -> DL/TL Accounts & Services -> Security (Primary / Collateral) -> Customer -> Enquiry ->
Enquire Security Summary |
Enquire on linked collateral | Inquiry |
10. DD / PO, Cheque Book maintenance, Stop Payments and Security Stationery maintenance
| BaNCS | -> Valuable Paper Inventory
System [VPIS] -> Enquiry of VPIS -> General Enquiry |
To check inventory status | Inquiry |
| BaNCS | -> VPIS -> Lost / Damaged / Cancelled Inventories | Location for Lost / Damaged / Cancelled Inventories | Inquiry |
| BaNCS | -> VPIS -> Enquiry of VPIS –
>Teller Level Inquiry |
Details of Inventory available at Teller level | Inquiry |
11. Parameters affecting automatic identification of NPAs and re-designing of audit processes
In terms of directives issued by Ministry of Finance and Reserve Bank of India, it is mandatory for banks to identify the bad loans through CBS / Systems instead of conventional methods. CBS like other software work on GIGO principle. Master Data play an important role in correct identification of Bad Loans.
Following are few scenarios wherein incorrect updation in Master Data, manipulation through transactions etc. may impact correct identification of bad loans through CBS.
| Parameters | Auditors’ Primary Checks | BaNCS Support System |
| Discrepancies in setting up the EMI / Installments | Ø Whether EMI correctly setup.
Ø Whether EMI / installment amount is matching with the Sanctioned Terms. Ø Whether periodicity of Installment is correctly classified as per Sanctioned Terms? |
DL/TL Accounts & Services -> Enquiries -> Account
– Deposit / CC / OD Accounts & Services -> Ø Enquiries -> Deposit / CC / OD Account (Short & Long Inquiry options are available under both menu.) |
| Multiple sets of EMI / Installments | Ø For case of Multiple sets of EMI e.g. For 1-5 years EMI of Rs. 7,000 and after 5 years Rs. 7,500
Ø Whether sets of EMI are properly entered? Ø Is there any substantial difference between 1st set of EMI and 2nd or other sets (e.g. 1st set Rs. 5,000 and 2ndRs. 1,00,000) which cast doubt on debt serviceability? |
– DL/TL Accounts & Services -> Enquiries -> Account
– Deposit / CC / OD Accounts & Services -> Ø Enquiries -> Deposit / CC / OD Account (Short & Long Inquiry options are available under both menu.) |
| Manipulation in SL / DP | Ø Changes in SL / DP should be cross checked with Sanctioned Letter.
Ø Whether any change in Limit is supported by necessary documentation? |
Ø Tailor-made report on Changes in Account Limits |
| Incorrect moratorium period | Ø Based on moratorium period CBS will identify the Loan Installment and will track repayment.
Ø In case the moratorium period / installment start date is erroneously updated system will not show correct result. |
Ø Account Master details (Long Inquiry) |
| Re-phasement without reporting it as reschedule | Ø Loan Account Installments are rephased / recalibrated without reporting the same as Re-schedule.
Ø Verify whether any change in Repayment instruction is made through System. Compare the said accounts with list of Restructured Accounts. |
Ø Account Master details (Long Inquiry) Report containing details of all the cases wherein EMI / Installment is changed should be sought |
| Installment Start Date is Future Date | Ø Check whether Installment Start Date entered as per sanctioned term?
Ø In case of future date system will not identify installment and any repayment received will be shown as “Overflow”. |
Ø Account Master details (Long Inquiry) |
| Fictitious credit through Office Account/ Inter-branch Account | Ø Are there any quarter / year end credits cited in the account?
Ø Check the source of Credit Entries. Ø Review transactions in Office Accounts / Inter Branch Accounts. |
Ø Deposit / CC / OD Accounts & Services -> Enquiries -> Transaction
Ø DL/TL Accounts & Services -> Enquiries – > Transaction |
| Round tripping from internal accounts | Ø Close scrutiny of transaction and review of chain / series of transaction for accounts with deficiency is required.
Ø Such transactions will inflate the Credit Turnover in the account. |
Ø Deposit / CC / OD Accounts & Services -> Enquiries -> Transaction
Ø DL/TL Accounts & Services -> Enquiries -> Transaction |
| Temporary Overdrafts | Ø Check whether the TOD is sanctioned in order to bring the overdrawn limit to base level
additional facility through TOD is sanctioned. |
Ø TOD Report |
| Devolved bills parked in Office Accounts and not in limit account | Ø Devolved Bills under LCs are required to be debited to the Limit Accounts only. Assessment of Asset Classification will be based on composite overdrawn portion Limit + LC Devolved amount (if any on devolvement)
Ø Check whether the amount of devolvement of LC backed bills are parked in Office Accounts or any separate account? |
Ø Report on Devolved bills under Import LC |
| Multiple CUST ID to prevent the other account from becoming NPA | Ø Check whether multiple CUST IDs have been opened for the borrower with different accounts?
Ø NPA Report and search all the case by few characters of Name. |
Ø Customer Management -> Enquiries -> Search by Name |
12. Important Interest Parameters
| i) OD/CC Accounts-> | Interest Rate History | ii) DL / TL -> Interest Rate History |
13. Audit of Office Account Transactions through CBS
Office accounts are opened for the purpose of parking entries till the time the final effect is not determined. However, at various occasions it has been observed that the entries remain in the said parking accounts for a long period. Moreover, in case of weak monitoring of the said accounts, the Office Accounts are susceptible to fraud and misappropriation.
There are various types of office accounts.
1. Based on Functionality
a. Pointing Type / Self Reconciling Accounts
b. Non Pointing Type Accounts
2. Based on Type of Entry
a. Sundry Accounts, Suspense Accounts
b. EOD/BOD Check Accounts
c. Inter branch Account
d. Mirror Accounts
e. Pool Accounts
Following are few audits actionable for auditor carrying out audit of Office Account Transactions.
| Events | Audit actionable | BaNCS support system |
| Cash Payment from Office Accounts | Authorization of Transaction as per Delegated Authority | BGL -> Enquire -> Transaction |
| TOD through Office Accounts | Through ineligible credit originating from a office account, customer can be accommodated.
It also circumvent the number of TODs granted to Customer. Moreover, interest will not be applied in the said case. |
BGL -> Enquire -> Transaction |
| Parking of Cash Difference in Office Accounts, Clearing / Remittance differences through Office Accounts | Difference in Reconciliation, Cash Shortage debited to Office Account and not reversed.
Review ledger account in detailed. |
BGL -> Enquire -> Transaction
“Outstanding BGL Transaction” Report |
| Rotation of entries in Office Accounts | To prevent entry being reported as long outstanding entry, a new transaction with debit and credit leg in the same account is posted. Thus, the system considers the new transaction date for reporting as outstanding entries.
Review transactions with same Debit and Credit amount through Ledger Scrutiny. |
BGL -> Enquire -> Transaction |
| Correctness in mapping of reversal transaction to originating transaction | If the transactions have not been reversed against the related originating entries the report generated by CBS will show incorrect outstanding items. | BGL -> Enquire -> Transaction |
| Value Dated (Back Dated) Transactions | Transaction credited in the Advance type accounts, Operative accounts with a value date (Back date) wherein the clear funds were not available in the office accounts.
Review the transactions from Revenue Leakage perspective. |
BGL -> Enquire -> Transaction |
| Round Tripping | Rotation of entry from office account to operative account(s) without any justification / source document.
Review the transactions from the Perspective of inflating credit turnover of account. |
BGL -> Enquire -> Transaction |
| Advance paid for Fixed Assets not capitalized | Entries for payment of advance against procurement of Fixed Assets not reversed. | BGL -> Enquire -> Transaction
“Outstanding BGL Transaction” Report |
| Income realized not credited to Revenue Account | Loan Installment received from Customer, not adjusted.
Processing Fees received, not credited to Income Account Charges collected, not credit to Income Account |
BGL -> Enquire -> Transaction
“Outstanding BGL Transaction” Report |
14. Audit Activity for LFAR and Tax Audit Requirements
Following are few checkpoints for auditors for reporting under Long Form Audit Report along with suggested system support.
| Audit Activity / Process
/ Audit Area |
Auditors’ Primary Checks | BaNCS Support System |
| Cash | Ø Physical verification of Cash Balance
Cash Balance as on the date of Audit Period |
Ø -> Reports -> Cash Related -> View Cash Summary (Click on Fetch)
Ø -> Branch Reports -> Cash Officer’s Jotting Book Report -> Reports -> Printing Reports -> Cashier / Teller Cash Report |
| Balances with RBI / SBI / Other Banks | Ø Balance as on Date
Ø Transactions in Mirror Accounts Reconciliation Statement (Generally outside of CBS) |
-> Branch Accounting (BGL) -> Enquire -> Transaction |
| Advances | Sanction Limit / Drawing Power setup | Ø DL/TL Accounts & Services -> Enquiries -> Account
Deposit / CC / OD Accounts & Services -> Enquiries -> Deposit / CC / OD Account |
| Advances | Ø Account & Customer Master parameters setup viz.
Ø Interest Parameters (Regular & Penal Interest) Ø Repayment Instructions Ø Standing Instructions (SI) Parameters Linking of Interest Rates with Benchmark Rates |
Ø DL/TL Accounts & Services -> Enquiries -> Account
Ø Deposit / CC / OD Accounts & Services -> Enquiries -> Deposit / CC / OD Account (Short & Long Inquiry options are available under both menu.) |
| Advances | Transactions in Borrower’s Account | Ø Deposit / CC / OD Accounts & Services -> Enquiries -> Transaction
Ø DL/TL Accounts & Services -> Enquiries -> Transaction |
| Advances | Interest Rate History | Ø Deposit / CC / OD Accounts & Services -> Interest Rate History
Ø DL/TL Accounts & Services -> Interest Rate History |
| Advances | Ø Conduct of Account and Credit Turnover
Ø Turnover of CC Account based on Borrower’s Business profile In case of Loan accounts ACTUAL recovery of Instalments and Interest |
Ø DL / TL Accounts & Services ->Enquiries –
>Long Ø Deposit/CC/OD Accounts & Services – >Enquiries ->Long |
| Advances | Temporary Overdraft | Ø Deposit / CC / OD Accounts & Services -> Enquiries -> Interest Rate History -> Select ‘Limit history’ from drop down menu |
| Advances | Ø Non-Performing Asset
Search an Account based on Criteria |
Ø DL / TL Accounts & Services ->Enquiries –
>Short -> Select Option “1” – TL / DL [Long Inquiry for NPA Date] Ø Deposit/CC/OD Accounts & Services – >Enquiries ->Short -> Select Option “2” – CC / OD [Long Inquiry for NPA Date] Ø Common Processing ->Overdue / NPA – >NPA Enquiry (Risk Grade Inquiry / NPA Status Inquiry) |
| Advances | Interest Report | Ø Product Sheets – To be requested from Data Center (if not available through user login) |
| Advances | Primary & Collateral Security Maintenance | Ø DL/ TL Accounts & Services -> Security (Primary/ Collateral) ->Customer -> Amend / Enquiry ->Amend / Enquire Security |
| Advances | Lien Marking | Ø DL/ TL Accounts & Services -> Security (Primary/ Collateral) ->Customer -> Amend
/ Enquiry ->Amend / Enquire Security (Under BaNCS – Collateral ID is required to be created before setting up limits) |
| Advances | Account Ledger Printing | Ø Print Menu available under DL / TL Accounts & Services and Deposit / CC / OD Accounts & Services |
| Advances | Non Fund based Facility (LC, BG) | Report generated from Trade module |
| Stationery | Physical Verification of Stationery and confirmation of Balance as per CBS | Ø Through Valuable Paper Inventory System [VPIS] module |
| Office Accounts (Suspense, Sundry etc.) | Ø Outstanding entries for reporting
Entries outstanding – Whether any provisioning is required? |
Ø Through offline reports viz. “Audit BGL accounts age wise break up “and “GL- Outstanding-Accnts” report. |
| Office Accounts (Suspense, Sundry etc.) | Printing of Office Accounts | BGL Accounting Menu |
| Inter Branch Account | Un-reconciled transactions | Through offline “Outstanding IBR Report“/ “IBR Summary report” |
| TDS Related | TDS Information and Reports | Ø Through offline monthly report on account wise / transaction wise Tax deduction. |
Author Bio
very important information shared thanks for the efforts made in putting 1 to 1 together