99 Point Audit Checklist - Under RBI Act, 1934

The RBI Act, 1934 Audit Checklist contained - 

🔹 1. Governance & Structure (10 Points)

• Requirements related to authorized capital, constitution of the Central Board, appointment of Governor/Deputy Governors, and conduct of board meetings.

• Ensures proper legal framework and structural alignment under Sections 4, 8, and 13.

Key Risk: Misgovernance or invalid board decisions
Mitigation: Legal vetting, appointment protocols, board calendars

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🔹 2. Monetary Policy & Note Issuance (12 Points)

• Includes CRR maintenance, issue of bank notes, management of currency chests, and note denomination rules.

• Sections 17, 22–25, 33 govern this domain.

Key Risk: Monetary instability or legal breaches in note issue
Mitigation: Automated CRR tracking, segregation of departments, compliance audits

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🔹 3. Financial Reporting & Surplus (6 Points)

• Weekly statements, reserve fund maintenance, and surplus transfer to GoI.

• Section 46, 47, and 53 compliance.

Key Risk: Misreporting or fiscal irregularities
Mitigation: Regular reconciliations and audits

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🔹 4. NBFC Regulation (20 Points)

• Registration, capital adequacy, KYC/AML, risk classification, fraud reporting, digital lending, outsourcing.

• Sections 45-IA, 45S, RBI Master Directions & Circulars.

Key Risk: Cancellation of license, reputational risk
Mitigation: Licensing tracker, internal control systems, partner due diligence

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🔹 5. KYC/AML & Consumer Protection (10 Points)

• Compliance with PMLA, name screening, grievance redressal, non-coercive recovery, and privacy.

Key Risk: Criminal prosecution, consumer lawsuits
Mitigation: Real-time KYC, audit trails, TAT-based grievance SOP

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🔹 6. Digital Compliance & Cybersecurity (10 Points)

• Compliance of digital lending apps, consent-based data use, co-lending & FLDG norms, cybersecurity protocols.

Key Risk: App suspension, data theft
Mitigation: App compliance audits, ISO 27001 framework, encryption policies

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🔹 7. Risk Management & Basel Norms (12 Points)

• ALM, ICAAP, CAR, stress testing, exposure norms, and off-balance-sheet monitoring.

Key Risk: Capital erosion or liquidity crisis
Mitigation: Scenario testing, daily dashboards, board risk reviews

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🔹 8. Returns & Regulatory Filings (10 Points)

• NBS-1, NBS-2, ALM returns, fraud reporting, wilful defaulters, RBI inspection compliance.

Key Risk: Penalties or blacklisting
Mitigation: Filing calendar, automated submission systems

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🔹 9. Forex & Overseas Transactions (6 Points)

• ECB, ODI, FEMA reporting, Nostro reconciliation, foreign remittance reporting.

Key Risk: FEMA breach or FX misstatements
Mitigation: FX tracker, dual validation of Form A2 & FIRC

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🔹 10. Audit, Disclosure & Policy Update (4 Points)

• Internal audits, suspense accounts, unclaimed deposits, policy alignment with new RBI directions.

Key Risk: Regulatory censure, fraud
Mitigation: Quarterly reviews, real-time tracking, document management systems

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📊 Checklist Summary Table

Category	No. of Checkpoints	Key Provisions Covered
Governance & Structure	10	Sec 4, 8, 13
Monetary & Note Issue	12	Sec 17, 22–25, 33
Financial Reporting	6	Sec 46, 47, 53
NBFC Regulations	20	Sec 45-IA, 45S, RBI Master Circulars
KYC/AML & Consumer	10	PMLA, RBI KYC
Digital & Cyber	10	RBI Digital Lending & Cybersecurity
Risk & Basel	12	RBI Basel III, ALM
Regulatory Filings	10	NBS, Fraud, Inspection
Forex & FEMA	6	FEMA, ECB, ODI
Audit & Disclosure	4	Suspense, Unclaimed Deposits

Download - RBI Regulatory Compliance Audit Checklist 

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	✅/❌