99 Point Audit Checklist – Under RBI Act, 1934

RBI Act, 1934 Audit Checklist Sr. No. Requirement Category Provision Consequences Mitigation Measures Status 1 Maintain authorized capital ₹5 crore Governance & Structure Sec 4 Legal breach Annual capital review by finance ✅/❌ 2 RBI Central Board formed properly Governance & Structure Sec 8 Governance lapses Legal vetting of appointment orders ✅/❌ 3 Governor, Dy Governors appointed as per law Governance & Structure Sec 8(1) Appointment can be invalid Appointment policy and documentation ✅/❌ 4 Meetings of Central Board held regularly Governance & Structure Sec 13 Operational inefficiency Calendarized schedule with alerts ✅/❌ 5 Maintain CRR Monetary & Note Issue Sec 42 Monetary penalties Automated CRR reporting system ✅/❌ 6 Report CRR to RBI Monetary & Note Issue Sec 42(1) Penal interest Daily liquidity monitoring ✅/❌ 7 Weekly balance sheet to Govt. Monetary & Note Issue Sec 53 Data compliance lapse Internal compliance team tracking ✅/❌ 8 Segregation: Issue vs. Banking Dept Monetary & Note Issue Sec 23 Conflict of operations SOP enforcement and segregation audit ✅/❌ 9 Currency issued only by Issue Dept Monetary & Note Issue Sec 22 Illegal note issuance SOP and internal control checks ✅/❌ 10 Currency chest compliance Monetary & Note Issue Sec 33 Currency shortfall Vault audit + central reconciliation ✅/❌ 11 Backing currency with assets Financial Reporting Sec 33 Market distrust Quarterly FX/gold reserve review ✅/❌ 12 No trading activity by RBI Financial Reporting Sec 21(2) Legal violation Staff training, internal audit ✅/❌ 13 Only permitted lending Financial Reporting Sec 17 Regulatory breach Lending policy mapped to RBI limits ✅/❌ 14 Advance to Govt. per limits Monetary & Note Issue Sec 17(5) Fiscal indiscipline MOUs & statutory reporting ✅/❌ 15 Note design approval by RBI Monetary & Note Issue Sec 25 Forgery risk RBI vetting of currency design ✅/❌ 16 Separate reserve fund maintained Monetary & Note Issue Sec 46 Balance sheet errors Year-end reconciliation ✅/❌ 17 Surplus transferred to GoI NBFC Regulation Sec 47 Fiscal anomaly Review of audited P&L ✅/❌ 18 Adherence to Note Issue Limit NBFC Regulation Sec 22(1) Legal violation Note issuance audit ✅/❌ 19 Follow denominations specified by RBI NBFC Regulation Sec 24 Circulation confusion SOP + currency strategy doc ✅/❌ 20 No issuance of bearer instruments NBFC Regulation Sec 31 Criminal action Compliance memo in board minutes ✅/❌ 21 NBFC registered with RBI NBFC Regulation Sec 45-IA Ban from operation Check CoR status quarterly ✅/❌ 22 Fit & proper directors (NBFC) NBFC Regulation RBI Circular Disqualification KYC & conflict checks ✅/❌ 23 Capital adequacy met NBFC Regulation RBI Norms Risk of insolvency Regular CAR monitoring ✅/❌ 24 Fair practices for lending NBFC Regulation RBI FPC Consumer lawsuits Internal compliance training ✅/❌ 25 Risk classification accuracy NBFC Regulation RBI Norms NPA misreporting Automated risk scoring ✅/❌ 26 Quarterly RBI returns NBFC Regulation RBI Returns Fines Regulatory calendar tracking ✅/❌ 27 KYC norms followed NBFC Regulation RBI KYC Master PMLA penalty Real-time customer verification ✅/❌ 28 AML systems in place NBFC Regulation PMLA/RBI Criminal action STR filing system ✅/❌ 29 RBI audits conducted timely NBFC Regulation Sec 35 Audit objections Calendarized external/internal audits ✅/❌ 30 RBI inspection queries addressed NBFC Regulation Sec 35 Blacklisting Central compliance cell ✅/❌ 31 Disclosure of interest rates KYC/AML & Consumer Protection RBI FPC Customer dissatisfaction Rate publishing via mail/website ✅/❌ 32 Transparent lending agreements KYC/AML & Consumer Protection RBI Norms Civil cases Legal vetting ✅/❌ 33 Grievance redressal system KYC/AML & Consumer Protection RBI Ombudsman Scheme Customer complaints 48-hour TAT policy ✅/❌ 34 Data protection for clients KYC/AML & Consumer Protection RBI Circular Data theft lawsuits Encryption and DLP controls ✅/❌ 35 Loan provisioning norms met KYC/AML & Consumer Protection RBI IRACP Penalty Monthly NPA report ✅/❌ 36 No unauthorized deposit collection KYC/AML & Consumer Protection Sec 45S Imprisonment Client on-boarding checks ✅/❌ 37 Customer identity properly verified Digital Compliance & Cybersecurity RBI KYC Legal action Aadhaar + PAN mandate ✅/❌ 38 RBI instructions for digital lending Digital Compliance & Cybersecurity 2022 Guidelines Suspension App vetting & RBI checklist ✅/❌ 39 Cybersecurity norms Digital Compliance & Cybersecurity RBI Cybersecurity Circular Data compromise ISO 27001 & audit trails ✅/❌ 40 Controlled outsourcing practices Digital Compliance & Cybersecurity Outsourcing Master Direction Regulatory breach SLA with vendors ✅/❌ 41 Internal audit of NBFCs Risk Management & Basel Norms Sec 45MA Financial risks Quarterly IA review ✅/❌ 42 Board risk oversight documented Risk Management & Basel Norms RBI Expectations Board audit remarks Annual board workshops ✅/❌ 43 Related party transactions monitored Risk Management & Basel Norms Governance Code Conflict of interest Disclosures + audit ✅/❌ 44 Dividend declaration norms followed Risk Management & Basel Norms RBI Circular Capital risk RBI permission obtained ✅/❌ 45 Liquidity coverage ratio maintained Risk Management & Basel Norms RBI Basel Norms Shortage Daily LCR dashboard ✅/❌ 46 Follow moratorium guidelines Regulatory Filings Sec 45 Lawsuit risk RBI circular compliance ✅/❌ 47 Avoid misleading advertisement Regulatory Filings Sec 58B Penalty ₹1L Legal content team review ✅/❌ 48 Proper record retention Regulatory Filings RBI Direction Non-traceability DMS + archival SOP ✅/❌ 49 All returns filed with RBI Regulatory Filings Sec 45IB Monetary fines Calendarized filing alerts ✅/❌ 50 Proper calculation of Net Owned Funds KYC/AML & Consumer Protection Sec 45-IA Rejection of registration Chartered accountant certification ✅/❌ 51 Timely response to RBI notices NBFC Regulation Sec 45L Blacklisting Compliance team SOP ✅/❌ 52 Internal capital adequacy assessment process NBFC Regulation RBI Guidelines Capital mismatch ICAAP policy review ✅/❌ 53 Compliance with Basel III norms NBFC Regulation RBI Basel III Capital inadequacy Quarterly compliance certification ✅/❌ 54 ALM policy implementation NBFC Regulation RBI ALM Guidelines Liquidity risk Monthly ALM committee meeting ✅/❌ 55 Stress testing framework NBFC Regulation RBI Risk Management Guidelines Capital shocks Scenario-based simulations ✅/❌ 56 Market risk monitoring NBFC Regulation RBI Risk Guidelines Trading loss VaR & sensitivity analysis ✅/❌ 57 Operational risk loss database NBFC Regulation RBI ORM Norms Inaccurate risk profiling Loss event data collection ✅/❌ 58 Outsourced activity risk assessment NBFC Regulation RBI Outsourcing Guidelines Vendor breach Risk-based vendor selection ✅/❌ 59 Staff awareness on RBI compliance NBFC Regulation RBI Norms Operational lapses Regular training calendar ✅/❌ 60 Customer consent on data sharing Digital Compliance & Cybersecurity RBI Digital Lending Guidelines Data misuse Consent-based digital flow ✅/❌ 61 Audit of digital lending apps Digital Compliance & Cybersecurity RBI Norms Non-compliance App compliance checklist ✅/❌ 62 Disclosure of bank/NBFC promoter holdings NBFC Regulation RBI Guidelines Corporate governance issue Annual disclosure to RBI ✅/❌ 63 Filing of FDI/FII data NBFC Regulation FEMA + RBI Penalty Regular submission via FIRMS portal ✅/❌ 64 Proper classification of investments NBFC Regulation RBI AFS/HFT Norms Investment loss Mark-to-market controls ✅/❌ 65 Adherence to SLR maintenance NBFC Regulation Banking Regulation Act & RBI Monetary penalty Daily SLR tracker ✅/❌ 66 Correct accounting of forward contracts NBFC Regulation RBI Forex Guidelines FX losses Treasury policy enforcement ✅/❌ 67 Monitoring ECB limits NBFC Regulation FEMA/RBI Regulatory violation ECB tracker & approval system ✅/❌ 68 Repatriation reporting of foreign remittances NBFC Regulation FEMA/RBI Penalty Form A2 and FIRC validation ✅/❌ 69 Reporting of wilful defaulters NBFC Regulation RBI Master Circular Reputational damage Quarterly board review ✅/❌ 70 Reporting frauds to RBI within 3 days NBFC Regulation RBI Fraud Reporting Circular Regulatory censure Automated fraud escalation ✅/❌ 71 Verification of PAN/Aadhaar linkage Risk Management & Basel Norms RBI Directions Account freezing eKYC automation ✅/❌ 72 Reporting of Non-Performing Investments Risk Management & Basel Norms RBI Prudential Norms Misinformation Periodic asset quality review ✅/❌ 73 Sanction screening against watchlists Risk Management & Basel Norms RBI AML/UNSCR Guidelines Legal & reputational risk Name screening tool ✅/❌ 74 Adherence to NBFC governance code Risk Management & Basel Norms RBI NBFC Guidelines Board censure Annual governance audit ✅/❌ 75 Due diligence before loan disbursement Risk Management & Basel Norms RBI Lending Norms Credit loss Pre-sanction checklist ✅/❌ 76 Non-coercive recovery practices Risk Management & Basel Norms RBI Guidelines Lawsuits & complaints Training of recovery agents ✅/❌ 77 Reporting to Credit Bureaus Risk Management & Basel Norms CICRA + RBI Consumer disputes Automated monthly upload ✅/❌ 78 Approval for overseas investments Regulatory Filings RBI ODI Norms FEMA breach Legal and compliance validation ✅/❌ 79 Renewal of NBFC license timely Regulatory Filings Sec 45IA Cancellation of license Annual calendar monitoring ✅/❌ 80 Monthly return NBS-1 filed Regulatory Filings RBI NBFC Returns Monetary penalty MIS-based reporting process ✅/❌ 81 Quarterly return NBS-2 filed Regulatory Filings RBI NBFC Returns Non-compliance penalty Quarterly compliance calendar ✅/❌ 82 Half-yearly ALM return submitted Regulatory Filings RBI NBFC Guidelines Liquidity risk penalty Dedicated ALM MIS ✅/❌ 83 Exposure norms followed Forex & Overseas Transactions RBI Exposure Norms Capital at risk Exposure limit checks ✅/❌ 84 Avoid conflict in lending to group entities Forex & Overseas Transactions RBI Corporate Governance Conflict of interest Board-level oversight ✅/❌ 85 KYC updates for long-standing accounts Forex & Overseas Transactions RBI KYC Account freeze Periodic KYC triggers ✅/❌ 86 Central KYC registry compliance Forex & Overseas Transactions CKYCR + RBI Reporting failure API-based upload ✅/❌ 87 Audit trail of digital transactions Forex & Overseas Transactions RBI Cybersecurity Fraud risk DMS + transaction logging ✅/❌ 88 Monitoring of co-lending arrangements Audit, Disclosure & Policy Update RBI Co-Lending Guidelines Operational confusion Partner MoUs + MIS review ✅/❌ 89 Monitoring of FLDG arrangements Audit, Disclosure & Policy Update RBI Digital Lending Guidelines Contingent liability Risk assessment framework ✅/❌ 90 Compliance with Loan Securitization norms Audit, Disclosure & Policy Update RBI Guidelines Accounting issues Transaction-level checklist ✅/❌ 91 Classification of off-balance sheet exposures Audit, Disclosure & Policy Update RBI Norms Risk concealment OBS disclosures in financials ✅/❌ 92 Reporting of Capital to Risk-weighted Assets Ratio Audit, Disclosure & Policy Update RBI Basel Norms Capital adequacy concerns Monthly CAR review ✅/❌ 93 Ensure RBI prior approval for change in control Audit, Disclosure & Policy Update RBI NBFC Norms Invalid transaction M&A legal opinion ✅/❌ 94 Reconciliation of Nostro accounts Uncategorized RBI Forex Control Reputational loss Monthly reconciliation process ✅/❌ 95 Audit of suspense accounts Uncategorized RBI Circular Fraud risk Quarterly suspense audit ✅/❌ 96 Review of unclaimed deposits Uncategorized RBI Circular Consumer dissatisfaction Annual dormant account reconciliation ✅/❌ 97 Timely update of policies with RBI directions Uncategorized RBI Master Circulars Policy non-alignment Annual policy calendar ✅/❌ 98 Ensure compliance with Inspection Reports Uncategorized RBI Inspection Repeat audit flags Inspection tracking register ✅/❌ 99 No delayed implementation of regulatory instructions Uncategorized RBI Act Sec 45L Penalties Internal compliance reminders ✅/❌