CP Cash Handling & Locker Policy PDF

MODULE:3-INTERNAL HOUSE KEEPING Learning Objective-This module will enable the participants to understand: The issues related to Safe Deposit Locker and Safe Custody Management & Control of VPIS S Preventive Vigilance Role of Cash Officer in RFIA/RBI Inspection and Branch Security to mitigate risk 5. Safe Deposit Locker and Safe Custody Safe Deposit Locker facility is offered at our select branches and allotment of lockers is subject to availability and compliance with other terms and conditions. Relation of the Bank and the Hirer in this connection is that of a licensor and licensee and not of a banker and customer. Allotment of Locker Individuals including Minors are eligible for Locker facility. General Guidelines, As per latest SOP, circular No : NBG/PBU/LIMA-SDL/23/2022 is extended to Minor, it must be ensured that lawful guardian of the minor is acting on behalf of the Minor. While providing the facility, signature of the lawful guardian acting on behalf of Minor shall be obtained, in Application Form as well as in all the corresponding documents, and it should be clearly mentioned as under: Mr/Mrs __________________ lawful guardian and acting on behalf of All customers (individuals, HUFs, Firms, Companies etc.) are eligible for the facility of Safe Custody Article. On application for Locker, Branch shall acknowledge the receipt of all Applications for allotment of locker and provide a wait list number to customers, if lockers are not available for immediate allotment. Lockers shall be provided on first come first serve basis. A written communication should be sent to the Applicant's address by Registered Post giving them time of 15 days to take over the locker. Passport size photographs of Locker -hirer(s) and Individual(s) authorised by Locker hirer(s) to operate the locker shall be obtained and preserved in the records pertaining to Locker -hirers maintained in the Branch. Bank shall also maintain a Branch wise list of vacant lockers as well as a wait- list in Core Banking System (CBS) or any other computerized system. Safe Custody Articles (sealed envelopes, packets, boxes) shall be accepted on application from customer. The Application shall contain terms and conditions related to safe custody facility. SAFE DEPOSIT LOCKER FACILITY TO VISUALLY CHALLENGED PERSON a) Safe Deposit Locker can be allotted in the name of Blind / Visually Challenged person(s), literate or illiterate, single or jointly with other person provided they are customer of the Bank having Savings Bank Account with us. b) Literate Blind / Visually Challenged locker hirer/(s) will also be required to put their thumb impression along with their signature and depending upon the availability at the branch, Blind / Visually Challenged person shall be allotted lockers with hinges or with an additional (personal) locking facility, as a confidence building measure. Using personal lock should be the choice of the locker hirer. c) In case of lockers allotted in the sole name of the Blind / Visually Challenged, he / she can operate the locker i. Through a Power of Attorney holder- the Visually Challenged person. Thereafter the bank may allow operations under the signatures of duly authorized person having notarized Power of Attorney. ii. Self-Operated Locker Facility- He/She can be allowed to avail self operating locker facility if he / she is capable of recognizing the articles kept in the locker and also capable of placing articles in the locker and withdrawing the same without the assistance of any other person, on furnishing undertaking to this effect in the prescribed format SDL Annexure A, subject to the following conditions. (Undertaking to this effect is included in indemnity cum undertaking). The Locker hirer may be clearly informed that Bank is not responsible for the contents kept in the locker. This clause has been included in the Letter of Undertaking. Locker can be operated by the hirer singly. Locker Access Register should always be signed by the Blind / Visually Challenged person in the presence of a person known to the Bank who should sign as a witness. While such a witness should be preferably customer of the Bank, a Bank official other than the Locker in Charge may also sign as a witness. Any operation carried out in the locker, by the hirer is at his own risk and Bank is not liable for any claim made at a future date. As soon as the locker operation is over, supervisor-in-charge of lockers should go personally to the locker room and verify that the particular locker cabinet is securely locked and that no item has been left out in the locker room. This has to be done, before allowing any other person to carry out their locker operations. The hirer should be informed by the supervisor, before the applicant leaves the branch premises, that he has verified the locker cabinet and that it has been securely locked and that no item has been left out in the locker room. This would enhance the confidence of the locker applicant. A declaration from the hirer for being informed by the bank official on the above lines may be obtained duly countersigned by the Supervisor-in-Charge of lockers. This declaration should be taken on the reverse of the Locker Access e that I have been informed by the Locker In case of lockers allotted in the name of blind / Visually Challenged person(s) jointly with other person(s). (i) Where one of the joint hirers is not blind / Visually Challenged: Blind / Visually Challenged person may have joint operation facility where one of the co-hirers is not blind / Visually Challenged. Following procedure will be followed in such cases: a. Where one of the hirer is Blind / Visually Challenged, a locker in joint names may be allotted. Co-hirer, who is not Blind / Visually Challenged, may be allowed to operate the locker jointly with the Blind / Visually Challenged hirer. b. At no point of time, the joint account holder, without the presence of the Blind / Visually Challenged account holder, is permitted to operate the locker. c. Signature in Locker access register should be done by Blind / Visually Challenged person as well as by joint locker holder in the presence of a person known to the bank who should sign as a witness. (ii) Where all the joint account holders are blind / Visually Challenged: In case of joint operation with E or S, any one of us or survivor(s) or any other mode of joint operation, where all hirers are Blind / Visually Challenged and if they insist on jointly operated locker facility and are prepared to furnish the undertaking to this effect, then the locker facility shall not be denied to them. Refer Circular No.: Master Circular No. NBG/PBU/LIMA/SB/22/2023-24 DTD. 03.10.2023 issued for banking facilities to visually challenged Locker Agreement Bank shall enter into an Agreement with the customer to whom locker facility is provided, on a duly stamped paper. A copy of the Locker Agreement in duplicate signed by both parties shall be furnished to Locker hirer to know their rights and responsibilities. Locker -hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. If bank suspects the deposit of any illegal or hazardous substance by any customer in the Safe Deposit Locker, the Bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances. REVISED SAFE DEPOSIT LOCKER AGREEMENT (REFER CIRCULAR No NBG/PBU/LIMA-SDL/22/2022 23 Dated 19.10.2022) Bank has approved the revised Locker Agreement (Annexure-I) for existing locker hirers who have not signed Agreement as advised by Circular dated 19.10.2022 and also issued Supplementary Agreement (Annexure-II) for locker-hirers who have signed revised Agreement as per above Circular. (Cir. No. NBG/PBU/LIMA-SDL/5/2023 - 24 Date: Sat 6 May 2023) Branches shall renew all existing Locker Agreements with existing locker-hirer customers with new Locker Agreement by 31.12.2022. Stamp duty charges for renewing existing Locker Agreement shall be borne by the existing Locker hirers CBS functionality has been rolled out on 16/10/2023 to maintain an electronic record regarding the obtention of details of supplementary/ revised locker agreement. New agreements are also required to be updated using same functionality. Locker Agreement Flag updation process in CBS is illustrated below: 1. Go to SDV/SC --> SDV: Locker Agreement Execution (Screen No. 35130) 2. Enter Customer SDV No. in SDV Account Number field. 3. Select U: Update in Update/ Enquire Agreement Status field. 4. Click on "Transmit" button. 5. Here, verify customer details such as Customer number, Customer Name, Cabinet ID and Locker ID. 6. Now under Agreement Execution Details, update Locker Agreement Flag from dropdown M: Main/ S: Supplemental. 7. Update Agreement Status from dropdown C: Completed. 8. Update Agreement Date and Click Transmit button. 9. On Transmit, Queue will be generated. On approval by Checker, Locker Agreement Execution Flag will be updated. (Circular No. NBG/PBU/LIMA-SDL/25/2023 - 24 Date: Thu 2 Nov 2023) Locker Rent For new hirers - Locker rent will be payable in advance up to 31st March of current financial year on pro- of the following year. After that, locker rent will be recovered every year on 2nd of April. For existing hirers - Annual rent will be recovered every year on 2nd April. In order to ensure prompt payment of locker rent, Branch shall obtain a Term Deposit, rges for breaking open the locker in case of such eventuality. Lien will be marked over the deposit and on surrender of Locker lien will be removed. Branches shall not insist on such Term Deposits from existing Locker hirers or those who have satisfactory operative account. Satisfactory operative account shall be established as per following criteria: Customer who are desirous of availing Locker facility/ or already having Locker shall maintain Savings Bank / Current Account with the Bank for recovery of rent and tracking thereof. a) Account should be KYC compliant. b) Customer should be maintaining Savings Bank/ Current Account for last 3 years. c) Account should not have been Inoperative for the last one year. d) Customer should be maintaining average account balance which would cover two Above criteria will not be applicable for Salaried, HNI and Wealth and VIP Customers. Further, Staff / Staff Pensioners would not be required to provide Term Deposit for availing locker facility. Branch shall not demand additional Term Deposits beyond what is specifically permitted from customer for allotment of locker facility. Apart from Locker rent, Bank may recover following charges in respect of locker: a) One time Registration Charge b) Break open charge for Locker c) Locker Visit Charge d) Locker Rent Overdue Charge In case Locker Rent is overdue, access to Locker shall be allowed only after collection of overdue rent, including overdue charges, if any. 12 Locker visits are free in locker during Financial Year. Thereafter charges applicable - + GST per visit. Locker overdue charges applicable as follows: Locker rent overdue charge (All sizes) Service Charge 1st Qtr 10% * 2nd Qtr 20% * 3rd Qtr 30% * 1 Year 40% * *of the Annual rent to be recovered in addition to Locker Rent. Overdue period is clarified as under: Standing Instruction set up, for advance rental for the financial year 2019-20, recoverable on 01.04.2019: Overdue charge @ 10%/20%/30%/40% of annual rent to be levied on 1st July 2019/1st October 2019/ 1st January 2020/1st April, 2020 respectively, if remaining unpaid till that date. Refer Circular No.: R&DB/BOD-SC/19/2022 - 23 Date: Sat 1 Oct 2022 For REVISION IN SERVICE CHARGE In case of deposit of articles under Safe Custody, service charges shall be recovered from depositor. Duplicate keys of Bank dealing with SBI are kept free of charges. NOMINATION FACILITY Nomination facility is available to Customers for Safe Deposit Lockers and Safe Custody of Articles, in accordance with the provisions of section 45-ZC to 45-ZF of the Banking Regulation Act, 1949 and forms prescribed under Banking Companies (Nomination) Rules, 1985 shall be used. In case the nominee is a minor, the same procedure as prescribed for bank deposit accounts shall be followed by Branches. It is clarified that various Forms (Forms SC1, SC2 and SC3 for Articles left in Safe Custody and Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under Banking Companies (Nomination) Rules, 1985, only Thumb-impression(s), if affixed, are required to be attested by two witnesses. Signatures of account holders/locker hirers need not be attested by witnesses. Nomination facility is available in Safe Deposit Locker hired singly as well as jointly. Locker hirers shall be advised to avail of this facility for smooth settlement of claim by legal heirs in unforeseen circumstances. In respect of lockers in joint names nomination rules are applicable only if lockers are operated jointly. Where the locker is hired in the in the name of a minor, the nomination shall be made by a person lawfully entitled to act on behalf of the minor. Nomination facility is available only in the case of individual depositor / sole proprietary concern and not in respect of persons jointly depositing articles under Safe Custody Articles facility. Nominations are made only in respect of locker contents held in individual capacity of hirers and not in any representative capacity as a holder of an office or otherwise. Nomination can be made in favour of individual only. As such, a nominee cannot be an Association, Trust, Society or any other Organisation or any Office-bearer thereof in An acknowledgement of Nomination Form submitted, with Nomination number generated by the System, should be given to locker hirer/article depositor. Such acknowledgement should also be given for cancellation and / or variation of nomination to all customers irrespective of whether the same is demanded by customers or not. A passport size photo of the nominee attested by the customer may be obtained from customers, at their option and preserved in the records. Standard Operating Procedure (SOP) for recording of Nomination in Bank Deposits, Safe Deposit Locker and Safe Custody Article was issued vide e-Circular No. NBG/PBU/ LIMA-NOMINAT/9/2020 21 dated 29.07.2020. A review of this SOP has been carried out as per extant instructions and revised SOP (Version 2.0) incorporating the instructions issued up to 31.07.2023 by Bank/Regulatory Authority is issued for use of operating functionaries. (Circular No. NBG/PBU/LIMA-NOMINAT/20/2023 -24 Date: Thu 14 Sep 2023) LOCKER OPERATION The locker hirer and/or the persons duly authorized by him/ her only shall be permitted to operate the locker with the key provided by the bank after proper verification of their identity and recording of authorization by the officials concerned of the branch. If the locker is in joint names, mandate of operation should be verified and access to hirer(s) should be allowed as per mandate. Branches shall permit Locker hirers to use an additional padlock of her / his own if there are such provisions in lockers, but Bank shall not make additional arrangements for the same. However, where locker hirer has also used own padlock, Locker custodian shall invariably check that hirer has not locked any other locker inadvertently before locker hirer marking exit time / sign off. Access to the hirer's Agent or Attorney should be allowed only against a Power of Attorney duly executed before Notary Public / Executive Magistrate in favour of the latter. The Power of Attorney should be specific and mention the locker number also. Power of Attorney holder can operate the locker but cannot surrender it. Branch Officer authorizing the locker -hirer to access the locker, after unlocking the first key shall not remain present when the locker is opened by the Locker -hirer. The branch shall ensure adequate privacy to locker -hirers in the operations when customers access the lockers at the same time. Branch shall maintain a record of all individuals, including Locker -hirers, who have accessed lockers and the date and time (both check-in and check-out time) on which they opened and closed the locker and obtain their signature. The Entry and Exit Register for recording access to Vault Room by locker -hirers or of individuals in the Vault Room area with their signatures at appropriate place in the records. Branch shall advise locker -hirers details of locker operation during the day through mail to registered email ID and SMS to mobile number of the customer before the end of the day as a positive confirmation. Branch shall provide mirror, table, chair, low stool (for ease of access to lockers at the bottom of Cabinet) and step ladder (for access to lockers at the top of Cabinet) for customer convenience. No other item shall be kept in the locker room except as mentioned above. Safe Deposit Receipt shall be issued to customer on receipt of articles and articles received for Safe Deposit are entered in Safe Custody Register. ted for safe deposit. Instead, Nomination facility should be availed by the Customer. Packets said to contain Keys should not be accepted unless they are tendered by persons authorised to withdraw them, or by their authorised representative. No key of a box in safe deposit should be held by the Branch (so that customer cannot contend that contents of the Box were removed, or branch has tampered with the contents. to t delivered only after obtention of probate from competent court. INTERNAL CONTROLS Locker Register and Locker Key Register shall be maintained in System with complete audit trails. Locker custodian shall invariably check whether the specific locker operated by the customer has been closed properly before allowing the customer to mark exit time /sign off. It is the responsibility of the custodian to check that locker is closed properly, and customer has marked exit time/ sign off. If a Locker is found to have been left open, the locker room must be immediately closed, and the Locker -hirer must be immediately contacted in person or through phone call/ SMS / to registered mobile number, e-mail or through letter to close the locker and satisfy as regards the contents of the locker. Locker custodian shall record the fact of not closing the locker properly in the Locker Access Register and its closure by the branch with the date and time. Custodian shall ensure that the activity should be completed expeditiously so that locker operation is not inordinately delayed / other locker hirers (s) are not inconvenienced. Where locker hirer has also used own padlock, Locker custodian shall invariably check that hirer has not locked any other locker inadvertently before locker hirer marking exit time/ sign off. Physical check of the locker room at the end of the day will be undertaken by locker custodian with proper record to ensure all lockers are properly closed, and that no person is inadvertently trapped in the locker room after banking hours. The keys of vacant and surrendered lockers shall be kept in sealed envelopes. Proper record of joint custody of master keys shall be maintained. The duplicate master keys set shall be deposited with another branch of the Bank. Inter change of locks is mandatory for surrendered lockers with proper record in Locker register and Locker Key Register before it is offered for re-hire. Locker custodian shall regularly/periodically check the keys maintained in the branch to ensure that they are in proper condition. Controllers/ their duly authorised representatives shall conduct surprise periodic verification at half yearly interval of surrendered/vacant lockers and their keys (officer who is not connected with the custody) and proper record shall be maintained as towards proof of such verification. LOCKER SURRENDER Request for Surrender of Locker shall be taken in writing from Locker -hirer(s) along with Keys. While surrendering the Locker, locker-hirers will confirm in writing that all contents of the locker has been removed and nothing is left. If the intention of hirer is merely to surrender a locker that has already been cleared of its contents; in that event the key could be surrendered by the hirer through an agent who should produce a specific letter of authority signed by the hirer bearing the attested specimen signature of the agent along with a letter of surrender signed by the hirer. No responsibility would devolve on the Bank as a consequence of its having accepted the key to the surrendered locker from the agent of the locker- hirer. In the event of surrender of a locker by a customer, he/she shall be charged rent up to the month in which locker is surrendered and advance rent, if any, for the remaining period shall be refunded. [e.g., where advance rent has been collected from Customer for the period Apr 21 to Mar 22 (12 months) and locker is surrendered in Oct 21, then rent up to Oct 21 only will be charged and advance rent for Nov 21 to Mar 22 (5 months) shall be refunded]. CLOSURE AND DISCHARGE OF LOCKER ITEMS Break open of the locker in a manner other than through the normal access by the customer using her/his original key or password under any one of the following circumstances: a) if the hirer loses the key and requests for breaking open the locker at their cost; or b) if Government/ Law Enforcement Agencies have approached the bank with Orders from a Court or Appropriate Competent Authority to seize lockers and request for access to the lockers; or c) if Bank is of the view that there is need to take back the locker as the locker hirer is not co-operating or not complying with terms and conditions of agreement. SECURITY OF STRONG ROOM /VAULT Branches in consultation with Security Department shall take necessary steps regularly to ensure locker cabinets are secured, having single point entry/ exit and protected against hazard of fire and rain/ flood water entering and damaging the lockers. Branches may cover the entry and exit of the strong room and the common areas of operation under CCTV camera and preserve its recording for a period of not less than 180 days to observe cases of theft or security breach. The security procedures shall be well-documented, and the staff concerned shall be properly trained in the procedure. The internal auditors shall verify and report on compliance to ensure that the procedures are strictly adhered to. RELOCATION OF LOCKER In events such as merger / closure / shifting of branch warranting physical relocation of lockers, the Branch shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and customers shall be intimated at least two months in advance along with options for them to change or close the facility. In case of unplanned shifting due to natural calamities or any other such emergency situation, Branch shall make efforts to intimate customers through SMS/e-Mail/ pop up in INB/ display outside Branch at the earliest. LIABILITY OF BANKS Branches shall exercise due diligence in maintaining and operating their locker and safety deposit systems. This includes ensuring proper functioning of the locker system, guarding against unauthorized access to lockers and providing appropriate safeguards against theft and robbery. The Bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. Branches shall, however, exercise appropriate care of their locker systems to protect their premises from such catastrophes. Branches shall bear responsibility to ensure that incidents like fire, theft/ burglary/ shortcomings, negligence and by any act of omission/commission. Instances where loss of contents of locker are due to incidents mentioned above or amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker. INSURANCE OF LOCKER CONTENTS Banks would not be under any liability to insure the contents of the locker against any risk whatsoever as they do not keep a record of the contents of the locker or of any articles removed there from or placed therein by the customer. Further, Branches shall under no circumstances offer, directly or indirectly, any insurance product to its locker hirers for insurance of locker contents. GUIDANCE AND PUBLICITY FOR CUSTOMERS Locker Agreement with all Terms & Conditions and Standard Operating Procedures (SOPs) along with various Charges under Safe Deposit Locker and Safe Custody also be put nominee(s) / survivor(s) / legal heir(s) of the deceased locker hirer/safe custody article. 6. Management & Control of VPIS and DEALING WITH SECURITY FORMS Boxes /parcels containing security forms must be opened immediately on their receipt from the Circle Stationery Department (CirSD). 2. The acknowledgement letter accompanying the consignments should be promptly dispatched to the CirSD duly signed in full by the officers holding joint custody of the security forms. 3. The stock of all security forms, after verification and record in the appropriate registers, will be kept in cupboards/bins, duly locked by the concerned official(s) (Cash Officer and Service Manager/ Branch Manager), inside the strong room. Branches where not having strong rooms should hold them in FBR safes /cupboards, securely locked and adequately insured against loss by fire. 4. The books of security forms should bear the evidence of having been counted and checked. Stationery stored outside the strong room should like-wise be insured against loss by fire. 5. On receipt, the stocks of security forms will be examined and verified with the relative invoices received from the CirSD. The total number of books /forms under each category of the security forms will be recorded in the Stamped and Unstamped Forms Register. All the security forms received from circle stationery department should be immediately acknowledged in CBS through VPIS system. Physical forms should be match with the VPIS system. 6. All subsequent deposits and withdrawals of books /forms will be posted in the respective columns in the above register to show the stock position at any given time. 7. The first and the last printed serial numbers will be entered under the appropriate headings in separate registers / sections of the register maintained for different types of the security forms. 8.Each entry in the registers must be authenticated by the designated officer is) holding custody of the books/forms. (Important point for audit purpose) 9. The date a book or a form is subsequently taken out for use will be recorded under the initials of the official(s) holding custody of the forms 10. It will be the joint responsibility of Joint custodian to ensure that the official who receives the security forms for use, initials the relevant column of the register in token of receiving the books /forms. Both Joint custodians will be jointly responsible for the stock of security forms and should exercise proper control over the issue of security forms held in their joint custody. 11. The security forms taken out of the strong room for use at the branch will be held in the single custody of the concerned official during the day. The forms will be delivered for actual use to the concerned assistants, duly entered in the Security Forms Issued Register. 12. Before taking the forms in his custody, the receiving assistant will verify the forms and initial in the register. The security forms will be issued to the concerned assistant on production of the voucher(s) duly passed /receipted. At the time of issue of the security forms, the concerned assistant and the official will ensure that the serial is unbroken. (Important point for audit purpose) 13. When away from his seat, the assistant must keep the security forms duly locked in his drawer. At the end of the day, he will return the unused security forms to the official who will account for the forms issued, including the destroyed forms, and tally the closing stock with the opening stock and the quantity used during the day. 14. Cancelled forms must be entered in CBS through proper menu. Cancellation Of BC Revised Instructions- cancellation at any time after its issuance, there is no legal requirement to obtain No Objection Letter from the payee, unless otherwise it is apparent from the face of the instrument or any evidence on record that it was delivered to the payee. However, in all cases of lost instruments (stale or valid), No Objection Letter is to be obtained from payee if purchaser is claimant, to rule out possibility of any claim from the payee/purchaser in future. In case of BC issued for Earnest Money Deposit /Security (Circular No.: R&DB/BC/31/2022 - 23 Date: Mon 2 Jan 2023 15. The returned forms will be held overnight by the official in his custody duly locked in his FBR safe or a cupboard in the strong room. 16. All blank cheque books will be kept under lock and key in the custody of an official not below the rank of accountant or at the discretion of the Controlling Authority, any other official. 17. The number of forms in each cheque book will be counted and checked in his presence when they are first received at the branch the first and the Last serial number in each cheque book, will be altered in the Cheque Book Register, in which other particulars will be subsequently recorded at the time of issue of the cheque books. 18. The Bank Guarantee and Letters of Credit forms which are printed on security paper and bear distinctive numbers, should be kept in charge of a supervising official, duly recorded in separate registers. (Although BGs are issued in paperless format through SFMS message at most of the branches, there are some branches which are issuing manual BGs.) 19. Approval in the prescribed formats as advised in para no.6.1, 6.2 & 6.3 of master Annexure A to this circular), to be obtained from CM(Ops) at RBO/AO for cancellation of any stale instrument (including reported lost) for amount greater than 50,000/- (Rupees fift deceased holder of instrument, irrespective of the amount. (Circular No. R&DB/BC/9/2023 - 24 Date: Thu 18 May 2023) 20. Master Cir No. R&DB /BC/33/2023-24 dtd 11.10.2023 on Bankers Cheque issued USE OF HOLOGRAM STICKERS Affixation of Hologram Sticker on Bank Drafts of Rs 1.50 Lac & above /Letters of Credit and Bank Guarantees was implemented. In view of the changed scenario, enhanced security features and other measures implemented for issue of Bank Drafts/LCs/BGs, the security measure of using Hologram Stickers has been examined and undernoted guidelines have been issued by the Bank: Discontinuation of Hologram on Drafts: The Drafts have since been substituted by Inter Office Instruments (IOIs). The IOI is self-reconciliatory in nature as payment is not permitted, if the inputs during payment of IOI do not tally with the data stored in the CBS at the time of issuance. With substantially improved security features and the IOI a/cs be in the present CBS environment. Discontinuation of Hologram on Letters of Credit: All LCs are now issued in paperless mode, rendering the Holograms redundant. In view of the aforesaid, it was decided that existing stock of Holograms might be moved to non-Exim Bill branches for affixation of BGs being issued by them. (Cir No. NBG/CPC/9/2017-18 dated 6th Mar 2018). HOW TO DEAL WITH UNDELIVERED CHEQUE BOOKS & WELCOME KITS a. All undelivered Cheques Books/ Welcome Kits are sent to Home Branches directly by India Post. b. Home Branches are required to deactivate all undelivered Cheque Book immediately in CBS on receipt from Dept. of Post & will keep in joint custody (Functionality for deactivation and its reactivation of cheque books at the time of delivery is under development). Arrange to contact account holder over his/her landline/Mobile no. registered with the Bank and record the same in Undelivered Cheque Book Register. c. If the Cheque book is not delivered to customer within 2 months, the branch will arrange to destroy the undelivered Cheque Book in presence of Joint Custodians and record the same in Undelivered Cheque Book Register. (As per SOP ) OBSOLETE SECURITY FORMS PROCEDURE FOR CUSTODY AND DESTRUCTION The following procedure is prescribed for the custody and subsequent destruction of security forms, which are rendered obsolete either due to change in their design or due to change in the scheme / accounting procedure etc. 1.The obsolete security forms, after they are properly identified, should be segregated and retained in the custody of the two officers holding joint custody of the security forms. 2. The details of the forms withdrawn should be recorded in a separate register, called OBSOLETE SECURITY FORMS REGISTER Sl.No. Name of security Circular Distinctive Value of forms Initials of Form rendered Reference Numbers as perlatest joint obsolete stationery custodian (with COS no. if valuation any) sheets From to 1 2 3 4 5 6 7 8 Amount Sanction Date of Date of Signature of BM / written off letter passing destruction Mgr (Actt) and joint (if any) entry custodians 9 10 11 12 13 14 15 3. All entries therein should be authenticated by the said joint custodians. Appropriate remarks should also be made against the original entries in the Security Forms Register / Stamped Unstamped Forms Register. 4. Where it is specifically advised that a change in the design of a particular form will not render it obsolete, existing stocks of such forms should be exhausted completely before bringing into use the new design forms. Such forms should not be considered obsolete. 5. The value of the obsolete security forms so segregated should be arrived at by reference to the latest stationery valuation sheets received from the stationery deptt. and the same should be written off after obtaining approval from the appropriate authority. A suitable remark about writing off should be recorded against the relative entries in the register introduced for the purpose. 6. After writing off the value, the obsolete security forms should be effectively destroyed in the presence of the said joint custodians and the Branch Manager / Manager (Accounts), all of whom will record their signatures in the above register in token of having ensured effective destruction of the obsolete security forms. 7. The forms will be destroyed either by burning (if small quantity) or by shredding into minute pieces, manually or otherwise, so that the forms are rendered irretrievable. The amount raised, if any, from sale of shredded forms will be credited to the Charges A/c (Sundries). 8. The Branch Manager, thereafter, will send to the Controlling Authority a Certificate of Destruction (specimen given below), the office copy of which should be retained on branch / office record. During the next inspection & audit of the branch / office the Inspecting Official /Circle Auditor should verify this certificate and point out in his report any lapses observed by him in this behalf. Transfer of IOI-DD/BC DEAF balances to RBI through a new automated functionality and handling DEAF claims under IOI-submitted by the customer As per RBI guidelines, the amount to be credited to the DEA Fund shall be the credit balance in any deposit account maintained with banks which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, whic others. Hence, a new automated functionality has been developed and rolled out which will enable monthly transfer of eligible balances in respect of category in BGL account no. 98606 (Inter Office Instrument issued account) to DEA fund. The new functionality will be made effective from 31.03.2023. The new functionality refers to Only category e same i.e., SBI-SBI, SBH- No Category- different i.e., SBI-SBH, SBBJ- Procedure for remittance of unclaimed IOI funds in CBS to RBI: New functionality identifies unclaimed IOIs (in issued status), the amount is being remitted by CB-Ops at Main Branch (MMB) on the last working day of the month as per the unique DEAF Code allotted to our Bank. This activity is carried out in similar lines wherein currently monthly transfer of DEA Fund eligible balances of interest bearing (SB etc) and non-interest bearing (CA etc) deposit accounts takes place. The identified funds are being transferred from Branches to their respective LHOs/ Central Business Groups and then to Mumbai Main Branch (MMB) through auto process involving BGL 3199909 of respective units. As per RBI guidelines, MMB remits this amount to RBI through e-Kuber facility in electronic form once in a month on the last working day. Monthly report regarding unclaimed IOI-DD/BC (of BGL 98602) transferred to/ claimed from RBI, will be sent to Branch report folder by GITC and extract report to MMB. Undelivered IOIs which are transferred to DEAF, if any must be kept in joint custody at the branch and their original vouchers be retained till the claim of customer. After transfer of fund to DEAF, status of each identified IOI- Accounting procedure will continue as mentioned in Circular No.: R&DB/BOD-GB/39/2022 - 23 Date: Thu 23 Mar 2023 SPECIMEN OF CERTIFICATE OF DESTRUCTION (BRANCH LETTER HEAD) The Controlling Authority State Bank of India _______________ OBSOLETE SECURITY FORMS CERTIFICATE OF DESTRUCTION We have to advise that the following obsolete security forms were effectively destroyed by burning / shredding on -----------------, as per the laid down procedure. These forms were rendered obsolete in terms of LHO Circular No. ----------------------------------, dated- ----------------. Particulars with distinctive members of forms Value written off ____________________________________ Yours faithfully, Branch Manager PREVENTIVE VIGILANCE Why preventive Vigilance? Majority of frauds occur due to non-adherence of laid down systems and procedures. Therefore, a major portion of such frauds, if not all, is preventable. There is a continuous need to ensure strict adherence to systems and procedures so that the integrity of the system is protected. Preventive Vigilance is therefore, a continuous process. It is a journey and not a destination. It is a means to an end and not an end itself. Very often the systems and procedures laid down are not adhered to, leading to perpetration of frauds. In order that our supervision and control systems are made effective at all levels, exercise of delegated powers at the operating levels should be judicious. There should be smooth flow of information upwards, by way of reports on house-keeping, control reports, excess drawings statements, etc. When this happens, there is very little opportunity for the unscrupulous elements to take advantage of the situation detrimental to the Bank. We take enormous care in our personal affairs so as to avoid being put to a loss. We are duty bound to take similar care in the affairs of the organization. OBJECTIVE OF PREVENTIVE VIGILANCE - To enhance level of managerial efficiency and effectiveness in the organization - Minimizing the incidence of frauds, irregularities, lapses etc. - Meticulous compliance of systems & procedures - Formulating remedial measures and initiating corrective action AREAS THAT REQUIRE CONSTANT PREVENTIVESTEPS REMITTANCES/CSH OPERATIONS Adhering to RBI instructions as regards maintenance of Currency Chest. Monitoring the entry / exit of persons in the Cash Department, particularly the strong room. Proper recounting of notes. The packing / bundling to be done only in the presence of third persons. Reconciliation of ATM balances with Switch Centre All the instructions on remittance issued from time to time must be followed meticulously Coverage of CCTVs surveillance should also cover all cash operations in the vaults / strong rooms and other cash handling areas to identify any mischief / irregularity Prevention of frauds on acting on telephonic instructions received from customers The genuineness of the telephonic calls should be ascertained before acting on them. Due diligence on the customer should be done while dealing with them. Fraudsters should not be allowed to take the advantage of lenient attitude and empathy of officers in the name of customer service. Do's Have your PC with latest ICCOMS software and ensure access to e-Kuber (CyM- CC) portal with digital signature. Antivirus Trend micro is installed and is up-to-date. Verify opening balance daily and then s Report CC transactions through ICCOMS and CyM-CC portal. If RBI website is inaccessible, fax Chest Slip to FSLO for data entry If internet connection is available in stand the require-alone PC, upload the files to RBI website after copying the required data files in a floppy from ICCOMS PC. If wrong transactions are reported or if there is an error in balance, please reverse/rectify the entries the next day, itself through proper menu options. RBI levies Penalty from the date of mistake to the date of rectification and also for wrong reporting, delayed reporting and non-reporting. Next morning CHECK whether your data is reflected correctly in LO Report Remittances from/to RBI and diversions from/to Chest-to-(nearby) Chest are to be a -to-CT- Verify DAILY that the balances in BGL a/c 98958BBBBBC, ICCOMS, Chest Slip generated from CyM-CC portal and Currency Chest (Physical) balances are tallied. Verify Reports and look for any discrepancy in Chest Slip generated from CyM- CC portal, ICCOMS figure, and CDC reports like Chest Report CFpd0404, Chest Slip CFpd0403Update Chest Slip Number and SCD Slip No. in ICCOMS Software. Upload Chest Slip generated from CyM CC portal on CC online portal. Educate acting Cash Officers to handle the software when you are on leave. Password secrecy for cash replenishment in ATMs and change of Passwords where there is change in incumbency/custody or specified intervalsmust be ensured Ensure rectification of irregularities pointed out by Audit/inspection further, ensure that the same irregularities do not re-occur be ensured Do not show Remittance as Deposit and Soiled remittance as Withdrawal. Do not put through any accounting (Br.Clg.) entries for Chest-to-Chest Currency Transfer. Do not authorize unless verified. Maker-Checker concept is to be ensured (i.e. Chest er should authorise as - updating the software. Instead of send back, do rectification entry (or) restore previous day's file. Do not yield to temptation or run after petty gains; it does not pay ultimately Do not solicit, seek or accept any gift / valuable either from the constituents of the Bank or from any one, more than what is permissible under the rules, it is not a good conduct Do not engage in any commercial proposition nor allow anyone dependent on you to do so; it does not further your interests Don't make any attempt to short circuit the prescribed procedures, it may prove risky Don't take any obligation from anyone; it may boomerang Don't allow any person to compel you to deviate from the laid system & procedure of the bank while taking any banking decision. HE IS MOST FREE FROM DANGER WHO EVEN WHEN SAFEIS ON GUARD 7. Role of Cash Officer in RFIA/RBI Inspection and Maintenance of Registers RISK FOCUSSED INTERNAL AUDIT AND RBI AUDIT In the present banking scenario, with a paradigm shift from regular bankable schemes to a more dynamic and newer avenue to capitalise on every available opportunity, robust Systems and Procedures, Controls etc. should take a front seat. Non-Compliance of laid down directives / guidelines of the regulators and those of the Bank has far-reaching consequences and may also entail public loss of image and credibility among stakeholders. RFIA AUDIT organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management control and governance Directors and Senior Management as to the system. In doing so, the function helps to reduce the risk of loss and reputational damage to the Bank. It is, therefore, an indispensable and an integral function for the safe and sound operation of a Bank. Objective Risk Focused Internal Audit (RFIA) aims at identification and assessment of risks at the Branch and providing feedback to the Operating Units and their Controllers regarding deficiencies. Operating units to take steps to improve the areas to reduce the risk for the Branch as well as for the Bank. All the branches / auditee units are divided under the following groups: GROUP I: All CAG, MCG, SAMG branches and 13 Special Outfits. NBG branches with Fund and Non-Fund exposures of Rs 250 Cr and above (Net of BPR exposure) in C&I and SSI. Branches with net Fund-Based exposure of Rs 150 Cr and above in C&I and SSI. GROUP II i. All branches with aggregate non-food advances (Fund Based) of Rs.25 Crores and above. ii. Branches handling FOREX transactions.(other than those included in Group I) iii. All BPR entities including SARBs. GROUP-III All remaining branches which are not included in Group I and II, will be in Group III. IDENTIFICATION OF BRANCHES FOR AUDIT: Deployment of analytics-based Outlier Model Identification of branches and formulating an appropriate Audit Plan is an important first step in the Audit Process. The process of identification is based on continuous monitoring of controls at a branch, based on data obtained from the source systems, system driven analysis of the meta data, assigning outlier audit scores to each branch based on defined scoring logic, prioritization of such branches for audit, which exhibit a lesser degree of controls (indicated by a higher outlier audit score) relative to a set of homogenous branches or other branches in the audit universe. The process flow for identification of Outlier branches is as under: Scoring Parameters: The following four parameters, which encompass the entire gamut of branch operations are considered for scrutiny for identification of Outlier Branches, A. CREDIT RISK MANAGEMENT 1. Gaps in controls (Based on Missing/Outlier/Incorrect data in source systems) 2. Exposure at stress Based on the arrears condition attached to each loan account indicating status of repayment of Instalment/Interest, stock statement, renewals of credit limit, irregularity in the account etc. 3. Quick Mortality Exposure 4. Growth in Advances 5. Increase in NPAs B. OPERATIONAL RISK MANAGEMENT i. Gaps in controls (Based on Missing/Outlier/Incorrect data in source systems). ii. Increase in Controllable Overheads iii. Reconciliation of Office Accounts iv. Complaints Nature and Resolution v. Spurt in Non-Interest Income C. MOVEMENT IN AUDIT RATING D. FRAUDS - Penal score over and above the score for critical parameters Prioritization of branches for audit i. Identification of outlier branches, within the Annual Audit Plan, will be done by the IAD as per the Standard Operating Procedure prepared or the purpose, with the following overarching conditions - a. Date of the next audit will not be more than 21 months from the date of previous audit b. Date of the next audit will not be less than 9 months from the date of previous audit (Minimum frequency of audit for Extremely High Risk/ High Risk branches as per the Basant Seth Committee guidelines) ii. The minimum period of 9 months between two audit dates will however not be a restraining factor for the IAD in carrying out early audits, through Spot Audits/Special reports, for specific areas of concern/instances of irregularities, emergent situation arising out of frauds, serious irregularities that have taken place/are reported to be taking place at any of the auditee units. OFFSITE AUDIT PROCESS: Offsite audit process for RFIA envisages, centralized monitoring of auditee units based on remote evaluation of data points available in the source systems - CBS, LOS, LLMS, CDC reports, warehoused data with IDSPM etc. The system is known as Remote Application for Dynamic Assessment of Risk (RADAR) (Earlier Risk Based Offsite Audit (RBOSA)). Under the process, exceptions are identified based on missing data, outliers, inconsistent data and these exceptions are flagged as Process Control/Compliance gaps to the auditee unit. This process has been developed to supplement the Onsite Audit - Risk Focused Internal Audit - currently in vogue in the Bank. The data as on the end of a month will be uploaded by the 15th day of the next month. On the basis of Score of any branch out of the Normalized (negative Score) Score of 1000 the Outlier status will be as under: Sr. No. Outlier Status Score Received Risk Perception 1 Outlier >450 2 Moderate >400 to 450 the one with high control gaps and hence carrying a higher risk. 3 Acceptable >250 to 400 4 Normal 0 to 250 is the one with limited gaps and hence carrying a lower risk. Under the process Exceptions are populated in a dashboard on the IAD intranet site, with drill down to the account level, for the audit unit to view and initiate corrective actions. Monthly Offsite Audit Score is assigned based on the percentage of exceptions observed. Average of monthly scores between two audit dates will be carried over for integration with the Onsite RFIA Score. Compliance of exceptions reported in the Offsite Audit Application will be required to be done in the source systems only. Onsite audits will continue to validate compliances of controls ascertained through off-site audit. In order to further improve the effectiveness of onsite audit processes and to ensure that the audit scoring system and the ratings derived from it adequately reflect the quality & effectiveness of internal controls, some changes like Creation of new Sub- Parameter - Customer Satisfaction Metric and Review of Threshold Limits for Tolerance of Deviations etc.have been made in RFIA (rolled out since 04.12.2019) Evidence Based Compliance Testing In RADAR (RADAR-EBCT) (Circular No.: IMA/Radar/8/2021 22 Date: Wed 12 Jan 2022) RADAR application populates deviations under various Value Statements based on inconsistent/outlier data on fortnightly basis. Branches carry out the necessary rectifications in the source systems and accordingly the deviations are marked off in the next uploading cycle. With a view to make compliance with RADAR exceptions effective and evidence based, Evidence Based Compliance in RADAR. Accordingly, a sample list of complied items will be provided in OARPS. Branches are required to upload the evidence of compliances for these sampled items within the assigned timelines, which upon verification by controllers will be scrutinised at CAOs/CAU. False compliances observed during this exercise will attract disincentive scores. RADAR- EBCT Universe: (a) RADAR EBCT would be carried out across all the branches. However, the universe would be administratively trifurcated as under: S.No. Type of EBCT Criteria for selection 1 Onsite RADAR-EBCT Branches that are subjected to RFIA during the FY. 2 TBA (Trigger Based Audit)- Branches identified as TBA branches EBCT during the FY. 3 Offsite RADAR-EBCT Branches that are not covered under the above two types. Onsite RADAR-EBCT will not be carried out for an auditee unit which has been subjected to Offsite-RADAR-EBCT or TBA-EBCT between last RFIA and the current RFIA to avoid duplication. Operational Process: For the purpose of RADAR-EBCT, 70 value statements (CRM-50, ORM-20) have been identified. Samples in the identified Value Statements generated under RADAR-EBCT will be pushed in OARPS. CAO will Schedule the EBCT Module in modular-OARPS for Branches. Branches will upload the evidence for the compliance within the assigned timelines. Compliance verification will be done by Controllers/ CAOs in case of Offsite RADAR-EBCT/ TBA-EBCT and by Internal Auditors (IAs)/ CAOs in case of Onsite RADAR-EBCT. System will be enabled to view/accept/reject the evidences by Controllers/ IAs/ CAOs as per the EBCT type. CAOs will take up the verification of evidences of respective branches/auditee units and close the EBCT for Branches. CAU will verify the evidences in respect of CAG/CCG Branches. Onsite RADAR-EBCT: No of False compliance. RADAR Disincentive Score (in %) 0-5 5% 6-10 10% 11-15 20% >15 25% Total penalty thus arrived will be deducted from RADAR average score during the audit period in CRM & ORM scores separately before integrating it with RFIA Score of the branch in the Onsite Audit. TBA-EBCT: The dis-incentive score for each value statement is 2 marks with a minimum penal score of 5 marks and without ceiling for maximum penal score. The penal scores are deducted from TBA score of the Branch for arriving at final CRM & ORM ratings. (c) Offsite-RADAR-EBCT: The details of the penalty structure are as under: No of False compliance. RADAR Disincentive Score (in %) 0-10 5% 11-20 10% 21-30 20% >30 25% Total penalty thus arrived will be deducted from RADAR CRM & ORM monthly scores separately in RADAR from the month of RADAR EBCT till next onsite audit of the Branch. Risk Focused Internal Audit (RFIA) (i) Disincentive (Negative Scores) on False Compliances (ii)Tracking of Residual Audit Observations (i) Disincentive (Negative Scores) on False Compliances a) To improve the compliance culture at the branches, the competent move the Maximum Cap on Penal Observations & OTMS Alerts. b) Further, to bring uniformity in awarding false compliance penal scores across all type of compliance testing, minimum penal score is reduced to 5 marks from 20 marks subject to 2 marks for each false compliance. The comparison of existing versus revised penal scores for false compliances is furnished hereunder: Type of Compliance Existing Penal Score for False Revised Penal Score for False Testing Compliances (FC) Compliances (FC) Penalty Score Max. Cap Penalty Score Max. Cap CRM ORM CRM ORM Compliance Audit 2 for each FC, 30 50 2 for each FC, No cap No cap Min. of 20 Min. of 5 Previous RFIA 2 for each FC, 30 50 2 for each FC, No cap No cap Compliance Testing Min. of 20 Min. of 5 during Current RFIA (Compliance Audit during RFIA) Evidence Based 2 for each FC, 30 50 2 for each FC, No cap No cap Compliance Testing Min. of 20 Min. of 5 (EBCT) related to Current RFIA Report Offsite Transaction 10 for each 30 50 2 for each FC, No cap No cap Monitoring System FC, Min. of 20 Min. of 5 (OTMS) Additionally, with a view to strengthening the compliance testing process and to bring in transparency by capturing granular details of false compliances, modifications in compliance testing process in Modular OARPS has been carried out. (ii) Tracking of Residual Audit Observations compliances of 95% of critical/high risk deviations with overall satisfactory compliance of more than 90% is submitted by the auditee unit, subject to, Confirmation of compliance of irregularities by the controllers Self-certification from branches and controllers that corrective measures have been initiated for similar deviations appearing in non-sampled accounts. Proper systems have been put in place to ensure against recurrence of irregularities in future. The RFIA report closure letter of these branches will comprise of all such pending subject to (a) submission of satisfactory compliances by the Controllers to CAOs/ CAU at the earliest, but not later than 2 months from the date of dealt with and (b) if the irregularities are not fully rectified before the next inspection, remaining irregularities 614.12.01.02 in subsequent RFIA by Internal auditors. Mitigat Residual Irregularities Compliance Module Residual Observations of Previous Compliance Module OARPS. Value Statements specifically in purview of Cash Officer/Cash-in-charge: Sr. Value Value Statement CRITIC Documents No. Stateme ALITY accepted as nt code Evidence of Compliance 1. 1111 Customers with None or C OVDs Improper KYC Documents 2. 1112 Individual Customers Where C PAN/Form 60 PAN Number and form-60/61 are not available/ not recorded in CBS 3. 1113 Individual customers with invalid C PAN PAN numbers 4. 1251 Inoperative accounts activated in H OVDs / KYC last one year without updating Annexures A/B KYC details 5. 12310 Cash received above Rs. 50000/- C Form 60 where pan/F60 -61 not available. 6. 1514 Locker module- nomination M Nomination Form details not captured in CBS Integration of Offsite scores with the Onsite Audit scores To present a comprehensive view of the controls through the derived audit scores/ratings, the scores for the Offsite Audits/Reviews is integrated with the scores of the onsite RFIA, based on areas scrutinized and the percentage of exposure scrutinized/reviewed by each of the Offsite Audits/Reviews. A score of 260 (26% of the total ORM-RFIA score) has been assigned to the ORM area of Offsite Audit, while, scores in the range of 145 to 305 (14.50% to 30.50%) of the total CRM-RFIA score (depending on the percentage of exposures scrutinized) is derived from the Offsite Audit for the CRM areas. INDEPENDENT RISK RATING & AUDIT RATING SYMBOLS Integrated scores i.e. score from onsite RFIA audit plus offsite audit) will determine the risk rating of the credit risk management and the operational risk management areas of the branch. Based on the integrated score, all the three Core Parameters i.e. CRM, ORM & FEMA (If applicable) with separate score of 1000 rating of each parameter will be awarded as under: Rating Model Scoring Bucket A 850 & above B 725 to 849 C 650 to 724 D 649 & below Symbols for Audit Rating will be in three letter model like AAA, ABA, ABC, ABD, BBA etc. Each letter will represent CRM, ORM & FEMA as under: 1st Letter-CRM Rating 2nd letter - ORM Rating 3rdLetter-FEMA Rating So the rating for different core parameters may be different For example the rating model and the description for the ratings are provided below: Audit Rating Description Symbols AAA Scores >=85% in CRM, ORM, FEMA AAB Score >=85% in CRM, Score >=85% in ORM Score between 72.50% & 84.99% in FEMA ACA Score >=85% in CRM Score between 65% & 72.50% in ORM Score >=85% in ORM The branches which are not subjected to FEMA audit will be rated only for CRM and ORM. ENHANCED WEIGHTAGE FOR EXTERNAL COMPLIANCES prescriptions is an important component of supervisory assessment by the RBI Branches reporting deviation level >15% in an area, will be assigned an Audit rating rea, irrespective of the score received in that area. NEGATIVE SCORE Further after final calculation of score, there is penalty of negative score as under, based on the situations at the branch Areas of Negative Particulars CRM ORM FEMA Scoring Max Negative Score Recurrent Income 25 25 NA Leakage Frauds (detected Category I Rating Downgrade with /reported during the Resetting of scores review period) Category II 50 Reporting/Monitorin (Maximum score or penalty) +15/-15 g of Frauds Annexure-III False compliance- related to previous audit RFIA report (Detected during Compliance audit or during current RFIA) (2 For each, 30** 50 50 Min -20*) Related to the current audit report (EBCT)(2 FOR EACH, Min 20) False Compliance OTMS alert (10for each, OTMS Min 20) False Compliance RADAR Deviations (1 for RADAR each, Mix 20) Deviation in Upto 15% 15 15 NA External Above 15% Rating Downgrad Compliance VS Downgrade to e by one notch Non-Compliance with RBI/BANK policies 10 Exposure at Stress (Avg of last 4 Qtrs) 20 Self Audit Variance of more than 20 20 10% in actual Audit score at sub-parameter level Compliance Delayed Submission 50 Remarks Total (Max. -ve 120 175 100 Scores) * Category I Fraud: ORM rating of the branch will be downgraded by one step and score will be reduced by a minimum of 50 or more. # Category II Fraud: Negative marks of 50 will be awarded, which may or may not entail a down grade of Risk Rating depending on the score Category-I: Frauds which involve gross negligence in following systems and procedures, abuse of delegated powers, staff involvement for personal gains and concealing of fraudulent transactions and non-reporting to controllers. Category II: Such type of frauds which are not covered under Category-I A summarized position of negative scores to be awarded at the branches where audit commenced 04.12.2019 onwards is tabulated hereunder: *Applicable to all branches where scores finalized on or after 26.02.2020, previously 1 for each Critical & High Risk Areas And 0.5 for each Medium & Low Risk areas, No Minimum). ** Reduced from 50 to 30 for all branches where scores finalized on or after 26.02.2020 Risk Focussed Internal Audit (RFIA) Treatment of Frauds RBI, in its Risk Assessment Report was not captured during Risk Focused Internal Audit (RFIA) by way of adverse - 2021 Observation, Category III frauds are bifurcated into Category III.A - III.B - RISK FOCUSED INTERNAL AUDIT (RFIA) TRIGGER BASED AUDITS WITH RFIA-OFFSITE AUDIT RATINGS REVIEW OF TBA BRANCHES SELECTION PARAMETERS AND PERIODICITY TBA Selection Parameters Optimum Inherent Medium & Low Risk branches as per Branch Risk Categorization Business Risk & Grouping (Group III) i.e. all branches with Net Advances Exposure < Rs.34.00 Crore and Deposits Rs. < Rs.125 Crore Control Risk as per Outlier Model (Normal and Acceptable Category) (ii) Branches rated as 'C' or 'D' in previous onsite RFIA are excluded. (iii) Fraud penalty should not have been imposed on branch and Category 1 or 2 FMRs (iv) Overall NPA as on 31st March including migration to SARG and write off during the year should not be more than 2%. a. In case, Retail Loans (PBBU+REHBU) >= 60% (Per. Segment NPA (PBBU+REHBU) should not be more than 1%) b. In case, Agri. Loans > 60% (ABU NPA should not be more than 5%) (Over all NPA should not be more than 2%) TBA Scoring and Shall be done by conversion of CRM and ORM parameter scores from Rating Outlier Status Scores -Offsite Audit scores. methodology Evidence Based Evidence Based Compliance Testing (EBCT) will be conducted Compliance in TBA branches based on Data of RADAR from the universe of Testing (EBCT) First Time Right (deviations are not populated for rectification by the branches Complied Accounts/Items months from the date of completion of TBA (offsite audit). This will True or False of Bank. Dis-incentive score for each value statement would be 2 marks subject to minimum penal score of 5 without ceiling on maximum penalty score. Review of TBA Performance of the branches would be continuously Branches sign of weakness (mentioned hereunder) continuously two quarters, will be taken up for full scope on-site audit, Outlier status of auditee unit slips by two stages i.e. and the unit remains in the downgraded status for the next quarter also (2 quarters continuously). Any category-I or category-II fraud(s) were reported through. FMRs TBA Periodicity periodicity for TBA shall come into effect from Audit Cycle 2022- 23. Dash Board for Offsite Audit Branches: On completion of the RFIA-Offsite Audit rating under Trigger based audit with RFIA Offsite Audit rating, an e-mail advising the Trigger based audit with RFIA-Offsite Audit score, RFIA-Offsite Audit rating and validity period of the rating would be sent to all the stake holders i.e. Branch, RBO, Administrative Office, Network and Circle. Trigger based audit with RFIA-Offsite Audit Board Scores/Rating will be made available on the IAD website with details of the audit ratings and scores of branches, movement of scores in various parameters. Self-Audit: Branches will continue to carry out Self Audit at Half Yearly Intervals, through online application. In order to demand required seriousness to the self-audit exercise and move forward with compliance culture through self-assessment of all controls, a negative score of 1 for each of the 24 Sub-parameters under ORM will be awarded, if there is a variance of more than 10% between the validated self-audit score awarded by the controller of the auditee unit and the audit score awarded by the IA. Similarly, negative score of 8 will be awarded for each 3 Sub-Parameters under CRM where there is a variance of more than 10% between the validated self-audit score awarded by the controller of the auditee unit and the audit score awarded by the IA. Maximum negative score under each of the core-parameter of ARF i.e. ORM and CRM is proposed to be 20. Timeline (in weeks) for submission of compliance remarks: Category Auditee Unit Controller Group I Branches 4 4 3 3 7 2 3 POLICY ON GENERAL MANAGEMENT OF BRANCHES: (Circular No.: NBG/ BRNWMRBI-REG/3/ 2021 22 Date: Fri 9 Jul 2021) Security System: The existing Security System and Security arrangements at the Branches shall be reviewed on annual basis as per Online Security Audit (OLSA) format by Security Officers along-with Risk Assessment Matrix (RAM). The Security guidelines shal a secured environment for both the staff and public in relation to their Banking operations. Customer Service Audit: Customer service surveys shall be conducted periodically to get the feedback from the customers to assess the level of customer service and the expectations in order to improve the service. Customer Service Department at LHO shall monitor the performance of the branches relating to customer service under their control and Customer Service Department at Corporate Centre shall monitor overall activity. The Inspection and Audit Department shall also conduct audit of Customer Service during their Risk Focused Internal Audit exercise of the branches. Evidence Based Compliance Testing (EBCT) It has been experienced that the quality of compliance carried out by the auditee units was far from satisfactory and similar deviations are repeated in the subsequent audits also, despite conduct of Compliance Audits in identified branches, Evidence Based Compliance Testing (EBCT), CBS based verification, penalties for false compliances and even down gradation of rating to improve and inculcate compliance culture. So, the process has been revised- Revised Compliance Workflow: Modular OARPS Compliance Workflow - Operational Process 1. Role of Auditee Units / Branches (a) Post closure of the Audit by the Internal Auditor(s) i.e. after finalization of RFIA scores by the Internal Auditor (IA), Compliance Module will be enabled to auditee units, to start/record the compliances in the Modular OARPS. (b) Number of days assigned by OARPS (Shorter timeline shall be assigned to critical and high-risk observations) and the remaining number of days left for complying with audit observation will be displayed against every audit observation in Modular OARPS - Compliance Workflow. (c) On elapse of the assigned timeline for every audit observation notwithstanding the expiry of overall timeline, OARPS will send the reminders/alerts to Controller(s) though email/SMS for their intervention (with a copy to CAO) for follow-up with the branches. activation of the Compliance Module and will be uploading Compliance evidences upfront i.e., at the time of compliance itself. (e) Compliance evidences uploaded by branches under Maker / Checker concept will also be required to be authorized by officials at Controlling office (MMGS-III & above). (f) A functionality for allocation of audit observations to the Makers/Checkers (Checker- 1) by the Branch Head (Checker -2) for remediation and submission of compliance remarks / uploading of compliance evidence is also developed in Modular OARPS. Branch Manager/ COO at CCG/CAG Branches can allocate the audit observations Core Parameter Wise, BU Wise, Account wise and area wise for eventual submission of compliance remarks / uploading of compliance evidence in Modular OARPS. (g) The branch needs to upload the relative documents/ compliance docu The branch is advised to upload the first page and last page or pages indicating material documentary evidence duly authenticated by the official concerned. (h) PF Numbers of Checker-1 and Checker-2 of branches and Authoriser of Controllers -1/2. Role of Checker 1 is to verify and authorise the compliance remarks/evidences submitted by the Field Officers /Accountant /Cash Officer /Divisional Manager at Branches and role of Checker-2 is to submit final compliance remarks to Controllers for onward submission to CAO(s)/CAU. Checker-2 can also authorise the compliance remarks/evidences submitted by the Field Officers/Accountant/ Cash Officer/ Divisional Manager. (i) Modular OARPS will check/validate for mandatory compliance percentage of 95% of the Critical/High Risk items with overall compliance of 90%, and 100% compliance of irregularities of high value accounts (>Rs.1 Crores and upto Rs.20 Crores), after which the branch will be able to submit the compliances to the concerned RBO/AO. Evidence Based Compliance Testing (EBCT) Module will be activated immediately on provisional acceptance of compliance remarks by CAOs/CAU. The EBCT module will display the details of the value statements for which the AU is required to upload documentary evidences. Functionality for allocation of module wise value statements to various team members for uploading of evidences would be available to the Branch Head/COO in the Compliance/EBCT Module. The EBCT module would remain active for a total of 9 working days 2 (two) working days for the AU to collect/scan/make ready the required documents for upload and 7 (seven) working days to the AU/Controller to upload, verify, re-verify correct (if required) and finally submit the required documents to the concerned CAO/CAU. E-mail alerts would be sent to the AU and controller at various stages of the life cycle of the EBCT module to enable upload of documents in a timely manner. The EBCT module would be automatically disabled/ deactivated for uploading of evidences on completion of stipulated 7 working days, however, an e-mail alert would be sent to branches and controllers two days prior to the deactivation of the EBCT module. gainst the SDRM Code, by using the documents upload option. The auditee units will be advised to upload the first page and last page of the documentary evidence duly authenticated. Facility of bulk upload option of compliance evidences will be made available to Auditee units in system. Controller(s) of the Auditee units would have a provision to view the evidences for correctness/relevance/completeness and to return to the Auditee units for necessary corrections, if required, till the deactivation of EBCT module. Processing Officer(s), if not satisfied with the evidences uploaded by the Auditee units, can call for further evidences through offline mode/SFTP of the respective CAO(s), before marking an item as false compliance. If documentary evidences, is not submitted within the life cycle of the EBCT module (9 working days) it will be treated that there is no documentary evidence available (since the compliances are already affirmed by the auditee units) and such compliances will be treated as false compliances. Residual irregularities will be advised to the controllers to draw up an action plan to rectify these irregularities within a time bound programme. Irregularities not rectified and not confirmed as such by the controllers, will be taken as persistent irregularities for the next RFIA. GM (CAO(s)/CAU) will be authorised to extend the period of the EBCT in such cases where the AU could not upload the evidences within the prescribed time, for reasons beyond the control of the AU e.g. Branch could not be opened due to floods, curfew or any other natural disaster. False Compliances & Penalties Document upload functionality in EBCT module of OARPS, requires involvement of three branch officials viz. Maker, Checker-1 and Checker-2. In respect of items where the documentary evidences are either not uploaded or false compliance is uploaded, as verified/scrutinised by the CAO, the Checker- 2 (Branch Manager) will be accountable for the false compliance. System will display the list of false compliances along with the name of the maker, checker(s), with date and time of submission in a dash board/report. Data on the false compliances i.e. Date of RFIA, Name of the Branch/ RBO/ABO/NW /Circle, Number of false compliances, PF IDs of the concerned Maker, Checker etc. will be shared with the HRMS team on ongoing basis. Penalty of 2 marks for each false compliance remark, with a minimum penalty of 20 marks would be imposed on the auditee unit in the ongoing RFIA, for which the compliances are being submitted. The maximum penalty is restricted to 50 marks in each of the areas of CRM and CRM. RISK FOCUSED INTERNAL AUDIT (RFIA) PENALTY ON DELAYED SUBMISSION OF RFIA COMPLIANCE: (Circular No.: IMA/IMA-RFIA/ 2/ 2021 - 22 Date: Thu 9 Sep 2021) To inculcate the culture of prompt submission of compliance of RFIA, it has been decided to levy the penalty on delayed submission of RFIA compliances: i) In order to of up to 2 weeks. ii) ii) In case of delayed submission of more than two weeks beyond the due date, a minimum penalty of 20 marks shall be imposed and thereafter a graded penalty shall be imposed @ 5 marks for subsequent delay per week with maximum penalty of 50 marks for delay beyond 8 weeks from the due date as enumerated below: Delay period Negative marks More than 2 weeks and up to 3 weeks 20 marks More than 3 weeks and up to 4 weeks 25 marks More than 4 weeks and up to 5 weeks 30 marks More than 5 weeks and up to 6 weeks 35 marks More than 6 weeks and up to 7 weeks 40 marks More than 7 weeks and up to 8 weeks 45 marks More than 8 weeks 50 marks The said penalty is proposed to be deducted from ORM score by Circle Audit Offices (CAOs) / Central Audit Unit (CAU), in addition to all other penalties being levied. VARIOUS REVISED GUIDELINES ON INCENTIVE AND DISINCENTIVE RELATED TO RISK FOCUSED INTERNAL AUDIT (RFIA) Circular No.: IAD/IAD-RFIA/12/2022 - 23 Date: Sat 31 Dec 2022 i. Incentive for timely submission of compliance remarks ii. Incentive for Zero False compliances iii. Disincentive for multiple returns of compliance remarks To improve compliance culture and encourage auditee units submit Compliance Remarks timely and accurately, Internal Audit department has come up with incentivizing / disincentivizing auditee units as under: i) Incentive for timely submission of compliance remarks of RFIA: Modular Online Audit Report Processing System (Mod-OARPS) will check/validate for mandatory compliance percentage of 95% of the Critical/High Risk items with overall compliance of 90% and 100% compliance of irregularities of high value accounts (more than Rs.1.00 Crore and up to Rs.20.00 Crores), after which the auditee unit will be able to submit the compliances to the concerned CAO/CAU through its Controller. Auditee units will be incentivized with 10 marks in the current audit report itself, subject to the following stipulations, a) Compliance remarks should have been submitted with in specified timelines and b) Compliance report is closed without return to auditee unit for the irregularities pointed out in RFIA report. ii) Incentive for Zero False Compliances (FC): To improve compliance culture and encourage the auditee units moving towards Zero False compliances, auditee unit will be incentivized with 10 marks each in CRM & ORM separately, in the next RFIA for the auditee units with zero False Compliances. iii) Disincentive for multiple returns of compliance remarks: For discouraging multiple returns of compliance remarks, when audit report does not meet the criteria of closure norms and CAO/CAU is not satisfied with the compliance remarks submitted, a graded penalty (maximum 50 marks) will be levied in the current audit report itself, as under: INCLUSION OF NEGATIVE MARKS FOR FALSE COMPLIANCE IN CDS NOTINGS IN HRMS SERVICE RECORDS: FALSE COMPLIANCE: In order to strengthen the compliance culture in our day to day banking activities for meeting the desired requirements laid down by Regulatory & Statutory bodies, a need was felt to give greater thrust to the same by incorporating the compliance related parameters in CDS effective from the Financial Year 2019-20. So, an additional compliance related parameter is included for assessing the Supervisory Discretionary scores from FY 2019-20. It has been decided to extend disincentive to officials who indulge in false compliance of statutory regulations. Based on the level of false compliance of the official as advised by Internal Audit Department, a negative score will be provided in CDS subject to a maximum of 5(-). The negative score will be deducted from the total score, before finalizing the annual CDS grade of the official. Further, the negative score will be deducted from each role of the official for the FY in which the false compliance is considered, irrespective of the fact that the official is no longer occupying the position/role during which the instance of false compliance occurred. Negative marks for false compliance will be awarded to officials at the levels of Checker 1 and/or Checker 2. Apart from that, a permanent noting will be made in the Service Records of the officials in HRMS, who have been awarded negative scores. The noting may also be taken into cognizance while considering an official for extension in service, promotion, posting in sensitive posts, etc. STANDARD OPERATING PROCEDURE (SOP) FOR INITIATION OF STAFF ACCOUNTABILITY/ DISCIPLINARY PROCEEDINGS IN CASES OF RFIA FALSE COMPLIANCES A mechanism of Screening Committee has been introduced at LHO level to examine each case of RFIA/EBCT false compliance in the Circle and then to decide on initiation of disciplinary action or no action. The Screening Committee at LHO will be headed by DGM (Compliance & Risk). The instructions contained in the SOP are effective from 01.04.2023. Branch/RBO/ZO operating functionaries are requested to refer circular for detailed guidelines. Circular No.: CDO/E&BC/SA/1/2023 - 24 Date: Thu 4 May 2023 Risk Focused Internal Audit Feedback Report from Women Branch Manager(s) on Internal Auditor behaviour would be obtained within 7 days of closure of RFIA. The feedback form is placed as Annexure- Very Good, Good, Satisfactory and Branch/RBO/ZO operating functionaries are requested to refer circular for detailed guidelines. Circular No.: IAD/IAD-RFIA/2/2023 - 24 Date: Wed 17 May 2023 IMPORTANT REGISTERS TO BE MAINTAINED IN CASH DEPARTMENT: Currency Chest/ Strong room access Register. Currency Chest Register. Small Coins Depot Registers. Intra-day Cash Verification Register: e-Register to be maintained. Register for Verification of Contents of Cash Boxes of SWOs Register for Verification of Physical Cash Balance by Joint Custodian Fortnightly Burglar Alarm Test Check Register Cash Sorting Machine Register Forged Note Detection and Impounding Register Mutilated Notes Adjudication e-Register Other Important Registers: Branch Cash Balance Register Vault Register ATM Cash/Physical Cash Balance Register Intra Day Cash Verification Register Petty Cash Register Remittance Received/Sent Register Cash Shortage/excess Register Mutilated Notes Exchange Register Forged Notes Detection/ Impounding Gold Loan sanction Register Regi. Gold Loans In & Out Register ATM Cash Replenishment Register Cash Remittance Register Excess/Short Cash in ATM Register Key handing over/ taking over Register Head Cashier Cash Jotting Book Cash Branch Cash Balance Book Receipt Delivery Book Vault Register Safe Custody Ledger ATM Cash Back Up Register Safe Custody Register GLIF Entry Reconciliation Register Inter Branch Cash Handling Register RBI Remittance Encashed Register COMPLIANCE AUDIT Internal Audit Department carries out Compliance Audit in respect of 15% of the units subjected to RFIA during the previous year nearly after 3-4 months after closure of the report so as to ascertain whether the branches have complied with rectification of irregularities pointed out in the audit report as certified by them as well as by their Controllers. Compliance is to act according to certain accepted standard or laid down systems and procedures. Its objectives are A. To ensure high standards, appropriate system & procedures and adequate B. To promote and maintain safe & healthy operating practices & conditions to create safe working environment. C. To enable the organisation to initiate necessary measures to protect it from all future hazards So, compliance of the reports needs to be carried out religiously by the branches as submitting the compliances in haste, branches submitted half- truth/ false compliances of RFIA report resulting in non- mitigation of the OF INHERENT, POTENTIAL & RESIDUAL RISKS, hence failure of the very purpose of the RFIA AUDIT. Branches should submit the compliance of the report in true spirit and as per the laid down system. False certification shall be treated as misconduct on the part of the officials and he may be penalized in terms of rule 50(4) of SBI OSR Based on the level of false compliance of the official as advised by Internal Audit Department, a negative score will be provided in CDS subject to a maximum of 5(-). The negative score will be deducted from the total score, before finalizing the annual CDS grade of the official.The noting may also be taken into cognizance while considering an official for extension in service, promotion, posting in sensitive posts, etc. Risk Focused Internal Audit (RFIA) Trigger Based Model for Reporting of Suspected Frauds (Circular No.: IAD/IAD- RFIA/8/2022 - 23 Date: Tue 29 Nov 2022) To develop the trigger- Management (CRM) and 52 value statements in Operational Risk Management n Modular Online Audit Report Processing System (Mod-OARPS). The list of identified CRM & ORM value statements are enclosed as Annexure-1 & Annexure -2 respectively of the circular. A Cash officer.Cash-in-charge must be aware about ORM Value Statements and ensure its compliance. The detailed of value statements are mentioned as follows: Operational Risk Management (ORM) - Fraud Flag Value Statements Sub-Sub- SDRM Sr. Sub-Parameter Module Parameter Module Name SubCode Value Statement Name No. Name No. Name Impact of False Certifications in Branch Managers Monthly Certificate (BMMC) Negative Score in RFIA (ORM) and Inflicting Penalty in CDS of Branch Managers In order to avert the instances of False certifications in BMMC and to improve compliance culture amongst operating units, 12 critical BMMC certifications have been identified and mapped with matching RFIA value statements (see Annexure-I of the chapter) for ascertaining false certifications by internal auditors during RFIA and levying penalties in the following manner: i. Inflicting a maximum penal score of 1 in CDS of the Branch Manager who is found to be indulging in false certifications in any of the 12 identified critical BMMC certifications within the maximum possible CDS penal score of 5 on account of RFIA false compliances. ii. Imposing maximum disincentive score of 10 in the ORM area of RFIA False compliances within the score band of 50 marks. The revised BMMC format, incorporating all suggested additions, deletions, and modifications, to be submitted by the Branch Managers/ Authorized Officers on e- BMMC Portal at Monthly / Quarterly / Half Yearly periodicity. For detailed instructions, readers are requested to go through the respective circular. (Circular No.: R&DB/BODMISC/29/2021 22 Date: Wed 18 Aug 2021) Following are the Cash Department Related Certifications in BMMC: Sr. Item RFIA Module Value Statement (Deviation No. Description Name Description) 1. Inoperative Handling of 201.12.01.03 - First debit in the Inoperative accounts Inoperative account induced by customer or third party activated during Accounts by manual debit in CBS is not through the month have referral / second level of authorization (i.e. been routed through maker and checker in CBS) after through Cheque exercising due diligence i.e. KYC/Mobile Referred and number updation, verification of drawer's Return Register signature, recording the cheque in Cheque and are being referred and returned register, ensuring closely genuineness of the mandate of the account monitored/ holder etc where the account is KYC Non- matched with compliant (Excluding debits through GCC the CBS report Terminal) to avert any 201.12.01.04 - First debit in the Inoperative fraud in account induced by customer or third party inoperative by manual debit in CBS is not through accounts. referral / second level of authorization (i.e. through maker and checker in CBS) after exercising due diligence i.e. Mobile number updation, verification of drawer's signature, recording the cheque in Cheque referred and returned register, ensuring genuineness of the mandate of the account holder, etc where the account is KYC Compliant. 2. Counterfeit Detection, 461.13.01.01 - All counterfeit notes Currency Notes Impounding detected have not been impounded, are detected, and acknowledged and entered in the Forged impounded and Reporting Note Detection and Impounding Register reported to of Counterfeit under authentication of cash officer and police Notes Accountant of the branch/office concerned authorities / RBI 461.13.01.02 - Counterfeit notes detected as per RBI and impounded have not been reported on guidelines. the counterfeit Currency Report portal (EC) 461.13.01.03 - Filing of FIR/reporting to the police authority has not been made in case of all counterfeit notes detected and impounded at the branch (for cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a report in the prescribed format should be sent to the Police Authorities along with the suspect counterfeit notes, at the end of the month, under copy to the Nodal Officer for information (ii) for cases of detection of counterfeit notes of 5 or more pieces in a single transaction, the counterfeit notes should be forwarded by the branch immediately to the local police authorities by filing FIR in the prescribed format under copy to the Nodal Officer for information. (EC) 461.13.01.04 - Acknowledgement for having submitted the notes to Police authorities are not available on record in all cases (EC) 461.13.01.05 - All Counterfeit Notes received back from the police authorities/ Courts have been not been preserved in the safe custody of the branch and record thereof is not maintained in a separate folio in Branch Documents register (EC) 3. Note Sorting Note counting 462.03.01.04 - Daily record of the notes Machine is machines processed through the Note Sorting being optimally machines, including the number of used in the counterfeits detected not maintained.(EC- branch and RBI-T3) proper record thereof is maintained 4. CCTV Maintenance 462.04.01.12 - CCTVs are not covering all Surveillance is of Currency cash operations inside the vault/strong covering all Chest room and other cash handling areas. operations in the (ECRBI- T3) vault and other cash handling areas (in respect of Currency Chest Branches) 5. Biometric Maintenance 462.04.01.02 - Chest Access Register not Access Control of Currency maintained as per guidelines. system to have Chest 462.04.01.03 - Access to Currency chest access inside is allowed to unauthorized personnel. vault is installed and in working 462.04.01.04 - Access to Currency chest condition (in is allowed without frisking and access respect of records not maintained in Strong Room Currency Chest Access cum Frisking Register. Branches). RBI INSPECTION: Currency chest is the property of Reserve Bank of India and we maintain it as an Agent of RBI. Cash Officer is responsible for maintenance of the currency chest & functioning of Cash department. He is responsible for correctness of the physical cash balance held at the branch as reflected in various registers of the cash department. Such as vault register, hand balance register & Chest register. Further, RBI has formulated the scheme of penalties for bank branches including currency chests in order to ensure that all bank branches provide proper security to cash and better customer service to members of public with regard to exchange of notes and coins, in keeping with the objectives of Clean Note Policy. Following are some examples of non-compliance with operational guidelines by currency chests and provision of penalty their against by RBI: OPERATIONAL GUIDELINES PENALTY Non-functioning of CCTV Penalty of Rs.5000 for Branch cash/documents kept in strong room each irregularity. Penalty Non-utilization of NSMs for sorting of notes (NSMs not used

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