Punjab National Bank has modified the Risk Based Internal Audit (RBIA) Policy of the Bank. Under the existing guidelines, there was a provision for granting extensions and placing unrectified irregularities under CO Monitoring.
What is CO Monitoring?
Each year, auditors conduct audits of various areas of a branch, including loan files. During the audit, the auditor may point out irregularities in loan files, such as missing KYC documents, the customer’s signature not being present on the sanction letter, and so on. Some irregularities that are not rectified by the branches are submitted for an extension under CO Monitoring. Under this system, branches get additional time to rectify the irregularities, while the irregularities remain under the monitoring of the Circle Office.
PNB said that it has been observed that this provision was not being implemented in its true letter and spirit. In view of the above, the system of “CO Monitoring” has been discontinued with immediate effect.
New Mechanism Introduced
Under the revised mechanism, the competent authority to permit an extension for unrectified irregularities shall be the HORBIA Committee at HO-IAD. The HORBIA Committee shall consist of the following members:
(i) Chief General Manager (CGM)/Seniormost General Manager (in the absence of CGM), Head Office, Inspection & Audit Division (HO: IAD) (Head of the Committee)
(ii) General Manager (HO-IAD)
(iii) Deputy General Manager (Dealing RBIA) at HO-IAD
(iv) AGM, HO-IAD
The Chief General Manager/Senior General Manager (HO-IAD), General Manager and DGM (HO-IAD) are mandatory for a quorum of three members.
The Chief Manager (Dealing RBIA, HO-IAD) will be the convenor of the Committee.
The extension in the timelines for rectification will now be recommended by the Zonal Head/Concerned Divisional Head for placing the same before the HORBIA Committee at HO-IAD.
The recommendation for an extension by the ZO Head/Concerned Divisional Head shall be based on proper justification with documentary evidence and shall clearly mention the number of days for which the extension is required. The Zonal Office will send a copy to the respective ZAO.
The HORBIA Committee shall permit an extension in the timeline for compliance with unrectified irregularities on the merits of the case, after taking into consideration various factors, such as the actual time required to rectify the irregularities, reasons for the delay in compliance, reliance on third parties, etc.
If the irregularities are not rectified within the extended period permitted by the HORBIA Committee, an examination of staff accountability shall be initiated as per the extant Bank guidelines circulated under the Staff Accountability Policy of the Bank.
