RfP CA of Branch Operations - 2018
Small Industries Development
Bank of India
Request for Proposal (RfP)
For
Concurrent Audit of
Operations of Branch Office, SIDBI
Small Industries Development Bank of India
Audit Vertical
th
4 FlOOR, SIDBI TOWER,
15, ASHOK MARG,
LUCKNOW - 226001
Website : www.sidbi.in
Tender No 314/2019/1407HO1/IAD
THE INFORMATION PROVIDED BY THE BIDDERS IN RESPONSE TO THIS T ENDER DOCUMENT WILL BECOME
THE PROPERTY OF SIDBI AND WILL NOT BE RETURNED. SIDBI RESERVES THE RIGHT TO AMEND,
RESCIND OR REISSUE THIS TENDER DOCUMENT AND ALL AMENDMENTS WILL BE ADVISED TO THE
BIDDERS AND SUCH AMENDMENTS WILL BE BINDING ON THEM.
(THIS DOCUMENT SHOULD NOT BE REUSED OR COPIED OR USED
EITHER PARTIALLY OR FULLY IN ANY FORM)
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RfP CA of Branch Operations - 2018
Critical Information Summary
1) SIDBI reserves the sole right for carrying out any amendments/ modifications /
changes including any addendum to this RfP. Such amendments / modifications /
changes including any addendum to this RfP shall be notified on SIDBI's website
www.sidbi.in and these will be binding on the bidders.
2) Bidders are advised to study the tender document carefully. Submission of bids
shall be deemed to have been done after careful study and examination of the
tender document with full understanding of its implications.
3) Any clarifications from bidder or any change in requirement will be posted on
SIDBI website. Hence, before submitting bids, bidder must ensure that such
clarifications / changes have been considered by them. SIDBI will not have
any responsibility in case some omission is done by any bidder.
4) In case of any clarification required by SIDBI to assist in the examination,
evaluation and comparison of bids, SIDBI may, at its discretion, ask the
bidder for clarification. The response / Clarification shall be in writing and no
change in the price of substance of the bid shall be sought, offered or
permitted.
5) Please note that all the information required as per the bidding document needs to
be provided. Incomplete information in these areas may lead to non-selection.
6) Modification And/ Or Withdrawal of Bids:
Bids once submitted will be treated as final and no further correspondence will be
entertained. No bid shall be modified after the deadline for submission of bids. No
bidder shall be allowed to withdraw the bid, if bidder happens to be the successful
bidder.
7) SIDBI has the right to reject any or all bids received without assigning any reason
whatsoever.
NOTE:
SIDBI SHALL NOT BE RESPONSIBLE FOR NON-RECEIPT / NON-
DELIVERY OF THE BID DOCUMENTS DUE TO ANY REASON,
WHATSOEVER.
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RfP CA of Branch Operations - 2018
Schedule of events:
Sr.
No. Bid Reference : 314/2019/1407HO1/IAD
Concurrent Audit of Operations of Branch
1 Purpose Office
One (1) Envelope for 1 Branch office
No. of Envelopes (Non window,
2 1 set of Hard copy should be submitted in
sealed) to be submitted
sealed single envelope for 1 Branch office.
December 19, 2018 at 2:00 p.m
3 Last date of submission of Bids
( Wednesday)
Venue, Date and Time of December 19, 2018 at 3:00 p.m at the
4
opening of Bids. address given at Sr. No. 8.
December 05, 2018 at 4:00 p.m
5 Date of pre-bid meeting
( Wednesday)
Response to clarifications
December 12, 2018 at 4:00 p.m
6 sought /pre-bid meeting queries
(Wednesday)
to be put on website.
6 months from the last date of submission of
7 Bid Validity
Bids.
The General Manager
Audit & Fraud Management Vertical
SIDBI, 4th Floor
SIDBI TOWER,
8 Address for submission of Bids
15, ASHOK MARG,
LUCKNOW - 226001
Ph : 0522-2288546-50
E-mail: auditvertical_ho@sidbi.in
Contact Persons:
Name & Designation Phone e-mail
9
K.R Samuel [DGM] 0522-4259735 auditvertical_ho@sidbi.in
Arup Kumar Vishwakarma [M] 0522-4259788 auditvertical_ho@sidbi.in
If a holiday is declared on the dates mentioned above, the effective date
would be the next working day at the same time specified above and at the
same venue unless communicated otherwise.
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RfP CA of Branch Operations - 2018
Introduction and Disclaimers
1.1 Purpose of RfP
The purpose of RfP is to shortlist experienced professional firm/ Limited
Liability Partnership (LLP) of Chartered Accountants, for undertaking
Concurrent Audit of Operations of Branch Office (BO) of SIDBI at the
following locations.
Table I
Direct Credit O/s
Sl. Branch Office Regional Office
as on March 31, 2018
No. (BO) (RO)
(` in Crore)
1 Tirupur Chennai 201
2 Erode Chennai 90
1.2 Information Provided
The Request for Proposal document contains statement derived from
information that is believed to be relevant at the date but does not purport to
provide all the information that may be necessary or desirable to enable an
intending contracting party to determine whether or not to enter into a contract
or arrangement with SIDBI. Neither SIDBI nor any of its employees, agents,
contractors or advisors give any representation or warranty, express or
implied, as to the accuracy or completeness of any information or statement
given or made in this document. Neither SIDBI nor any of its employees,
agents, contractors, or advisors has carried out or will carry out an
independent audit or verification exercise in relation to the contents of any
part of the document.
1.3 Disclaimer
Subject to any law to the contrary, and to the maximum extent permitted by
law, SIDBI and its officers, employees, contractors, agents and advisors
disclaim all liability from any loss or damage (whether foreseeable or not)
suffered by any person acting on or refraining from acting because of any
information including forecasts, statements, estimates or projections
contained in this RfP document or conduct ancillary to it whether or not the
loss or damage arises in connection with any negligence, omission, default,
lack of care or misrepresentation on the part of SIDBI or any of its officers,
employees, contractors, agents, or advisers.
1.4 Costs to be borne by Applicants
All costs and expenses incurred by Applicants in any way associated with the
development, preparation, and submission of responses, including but not
limited to the attendance at meetings, discussions, demonstrations, etc. and
providing any additional information required by SIDBI, will be borne entirely
and exclusively by the Applicant.
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RfP CA of Branch Operations - 2018
1.5 No Legal Relationship
No binding legal relationship will exist between any of the Applicants and
SIDBI until execution of a contractual agreement.
1.6 Applicant Obligation to Inform Itself
The Applicant must conduct its own investigation and analysis regarding any
information contained in the RfP document and the meaning and impact of
that information.
1.7 Evaluation of Offers
Each applicant acknowledges and accepts that SIDBI may in its absolute
discretion apply selection criteria specified in the document for evaluation of
proposals for shortlisting / selecting the eligible Concurrent Auditor(s). The
RfP document will not form part of any contract or arrangement, which may
result from the issue of this document or any investigation or review carried
out by a Recipient.
1.8 Maintaining Secrecy and Confidentiality
The applicant shall be liable to maintain secrecy and confidentiality of all the
information / data / operations, etc. of SIDBI.
1.9 Errors and Omissions
Each applicant should notify SIDBI of any error, omission, or discrepancy
found in this RfP document.
1.10 Acceptance of Terms
An applicant will, by responding to SIDBI for RfP, be deemed to have
accepted the terms of this Introduction and Disclaimer.
2. Lodgement of RfP
2.1 RfP submission:
RfP document submission is required to be done by December 19, 2018
(2.00 PM) as under :-
Hard copy should be submitted at the following address in sealed
single envelope superscribed at the top of the envelope "Request
for Proposal (RfP) for Concurrent Audit of Operations of ______ BO".
The General Manager
Audit & Fraud Management Vertical
Small Industries Development Bank of India (SIDBI)
SIDBI Tower,15, Ashok Marg,
Lucknow 226001 (U. P.)
Telephones : (0522) 2288546-50
Email : auditvertical_ho@sidbi.in
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RfP CA of Branch Operations - 2018
RfP must be submitted on or before the aforementioned closing date and
time.
Fax / e-mail copies of any submission are not acceptable and
will be rejected by the Bank.
Copy of Bids and attachments must be provided in a sealed
envelope.
The person(s) signing the Bids shall initial all pages of the RfP. The Bids
shall contain no erasures or overwriting except as necessary to correct
errors made by the applicant, in which case corrections shall be initialed by
the person(s) signing the Bids.
If the submission does not include all the information required or is
incomplete, the proposal is liable to be rejected.
All submissions, including any accompanying documents, will become the
property of SIDBI. Applicants shall be deemed to license, and grant all
rights to SIDBI to reproduce the whole or any portion of their submission for
the purpose of evaluation, to disclose the contents of the submission to
other Respondents and to disclose and / or use the contents of the
submission as the basis for any resulting RfP process, notwithstanding any
copyright or other intellectual property right that may subsist in the
submission or accompanying documents.
2.2 RfP Validity Period
The proposal must remain valid and open for evaluation according to its
terms for a period of at least six (6) months from the time the RfP closes
on the deadline for lodgment of RfP.
2.3 Cost of Bid Document
No cost has been prescribed for the RfP Document.
2.4 One Bid / application per applicant
Applicant can submit application for engagement as concurrent auditor
for branches where applicant has a regular office set-up, either Head
Office or full fledged branch offices, at respective locations of SIDBI
branches.
As a matter of policy, SIDBI shall engage services of a firm/ LLP for
carrying out concurrent audit of one branch only, at a time.
Accordingly, in case, if the applicant applied for multiple branches and
found suitable, they may be considered for one branch only, at the sole
discretion of SIDBI.
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RfP CA of Branch Operations - 2018
Firms already engaged with SIDBI:
SIDBI shall engage the services of a firm / LLP for carrying out
Concurrent Audit of only one Branch Office (BO) at a time.
Accordingly, in case the applicant has already been engaged as
Concurrent Auditor by SIDBI for any of its BO and / or HO
Verticals, such Firm/LLP will not be eligible under this RfP.
Such firms/LLP only after completion of specific period
(continuous three years), cooling period of one year would be
observed for considering the services of the CA firm again for
its BO or HO Vertical, subject to fulfilling eligibility criteria by
such firms/LLP.
2.5 Late Applications
Any RfP / application received after the deadline for submission of the RfPs /
applications will be treated as "Late Application" and such late applications
shall not be considered at all for competitive consideration.
2.6 Request for Proposal (RfP)
SIDBI may, in its absolute discretion, seek additional information or material
from any applicants after the RfP closes and all such information and material
provided must be taken to form part of that Applicant's response.
Applicants should provide details of their contact persons, Fax, Telephone,
email and full address(s) to ensure that replies to Bids could be conveyed
promptly.
If SIDBI, in its absolute discretion, deems that the originator of the question
will gain an advantage by a response to a question, then SIDBI reserves the
right to communicate such response to all Applicants.
SIDBI may, in its absolute discretion, engage in discussion or negotiation with
any Applicant (or simultaneously with more than one Applicant) after the Bids
closes to improve or clarify any response.
2.7 Notification
SIDBI will notify all short-listed Applicants in writing as soon as practicable
about the outcome of their Bids. SIDBI is not obliged to provide any reasons
for any such acceptance or rejection.
2.8 Disqualification
Any form of canvassing / lobbying / influence / query regarding shortlisting,
status, etc. will lead to disqualification.
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RfP CA of Branch Operations - 2018
3. About SIDBI
3.1 Small Industries Development Bank of India (SIDBI), set up on April 2,
1990 under an Act of Indian Parliament, is the Principal Financial
Institution for the Promotion, Financing and Development of the Micro,
Small and Medium Enterprise (MSME) sector and for Co-ordination of
the functions of the institutions engaged in similar activities.
SIDBI provides its services through a network of Branch Offices
located all over India. Detailed information on the functions of SIDBI is
provided on the website, www.sidbi.in
3.2 SIDBI offers several financial products and services for catering the
financial needs of Micro, Small and Medium Enterprises (MSMEs)
through its field level offices. These include the following broad areas:
Direct Finance
Bills Finance
Refinance
International Finance
Promotion and Development
Micro-finance
4. Project Particulars
4.1 Project Objective and Scope of Operations of SIDBI's Branches
SIDBI's Branch Office(s) functions include credit dispensation under
Direct Credit and other day to day operations of the Bank. The
selected Chartered Accountants would undertake the concurrent
audit of operations of the Branch (es) on daily/ regular basis and
based on their findings also regularly suggest measures to improve
the functioning of operations of Branch of SIDBI. Assignment would
also include verification and confirmation on the adequacy of
internal controls and IT system for sustaining operations. The staff
deputed by the firm / LLP of Chartered Accountants for carrying out
the audit should be qualified and experienced in the area of work.
Concurrent Audit covers the Branch Operations including its core
functions such as credit appraisal, pre-sanction and post-sanction
supervision mainly under Direct Credit, Working Capital, Receivable
Finance, Refinance and other day to day operations, various lists/
statements being submitted to SIDBI towards finance availed by
them and other Companies/ Banks/ Institutions covered under
resource support business of the Bank. The objective and scope of
the Concurrent Audit to be undertaken in the above center are as
under:
A. Objectives and Work areas of Concurrent Audit
The main objectives and Work areas of the concurrent audit are as
follows:
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RfP CA of Branch Operations - 2018
a. Verifying whether sanctions for advances and disbursement thereof is
obtained from competent authority.
b. Scrutinizing the completeness of documents submitted for availing
advances and other facilities.
c. Ensuring compliance of laid down systems, procedures and policies.
d. Examining books of accounts, records and / or registers to ensure that
they are maintained in accordance with the prescribed systems/
reconciled with general ledger.
e. Physical checking of stocks financed under working capital scheme at
relevant places.
f. Detection and arresting of leakage of income, if any.
g. To follow up with authorities to ensure timely rectification of
irregularities reported with regard to the operations of the branch and
rectified on the spot/ during audit period itself.
h. Verify prompt, timely and regular submission of the periodical and
statutory returns.
i. Any violation of procedure is brought to light.
j. Reporting any irregularity in working which may result in financial or
other loss to the Bank.
k. Feedback on regulatory compliances.
l. Physical checking of live Bills under MSME-Receivable Finance
Scheme.
m. Verification of Daily Liability Register under MSME-Receivable Finance
Scheme.
n. Physical verification of approvals granted for discounting of Bills under
MSME-Receivable Finance Scheme.
o. Any other areas on the operations of the Bank which are vital, in
nature.
B. Scope
a) Whether the transactions or decisions are within the policy parameters
laid down by the Head Office.
b) Sanction and disbursement of loans & advances are within the policy
parameters laid down by the Bank. All the loan disbursements are to
be checked / verified by the concurrent auditors before actual
disbursements and all the disbursement notes need to be signed off by
the concurrent auditors (CA Partner).
c) Verify whether pre-sanction / pre-disbursement / post-disbursement
visits are undertaken and reports are available on record.
d) Sanctions / disbursements are within the delegated authority.
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RfP CA of Branch Operations - 2018
e) Sanctions / disbursements do not violate the instructions or policy
prescriptions of the RBI / other regulators.
f) Compliance to RBI guidelines relating to defaulters list / Caution Advice
/ CIBIL List / IBA caution list for Third Party Entity / fraudulent
borrowers list, KYC / AML, etc. is done satisfactorily.
g) DoP has been exercised properly and Post Sanction Reporting (PSR),
wherever applicable, is sent to Post Sanction Reporting Authority
(PSRA).
h) Security creation has been done properly. All the prescribed and
necessary documents are collected from borrowers.
i) Verify whether all charges of SIDBI on the assets mortgaged/
hypothecated are registered with Registrar of Companies
(ROC)/CERSAI.
j) Pre-disbursement conditions are duly complied with. Deviations made,
if any, are within the guidelines issued from time to time.
k) Verify the end use of term loan disbursed by the Branch for the
purpose it is meant for.
l) Undertake visits, wherever necessary, to the projects under
implementation and observation, if any, in terms of time over-run/
reasons for delay in implementation of the project, bring to the notice of
the authority of the Branch.
m) All the receipts have been properly accounted for/ appropriated as per
Bank's accounting policy.
n) All regulatory provisions/ guidelines are duly complied with (e.g. areas
including TDS and service tax / professional tax/GST etc).
o) Whether in all cases where the statements/ documents (stock
statement, No-lien account statement, project completion report, final
list of machinery, Balance Confirmation Certificate, Acknowledgment of
Debt, Annual report etc.) are not received even after a reasonable time,
prompt action is taken by the Branch to get the same.
p) Verify whether there is any mis-utilisation of the loans and whether
there are instances indicative of diversion of funds.
q) Detection & prevention of revenue leakages in the operation of the
Branch through close examination of income and expenditure.
r) Verify whether there are any borrowal accounts (other than those
reported by the Branch) which are showing early warning signals or
symptoms of sickness and/or can be classified as NPAs. If so,
ascertain the reasons therefore and analyse the steps taken by the
branch in the matter.
s) Verify whether the classifications of loan assets of the Branch have
been done properly and income recognition norms have been followed
as per Bank's guidelines and procedure/ RBI norms by the respective
Branch.
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RfP CA of Branch Operations - 2018
t) Verify whether subsidy claims like CLCSS/TUFS etc. are as per the
respective scheme and lodged timely with govt. authorities by the
Branch through Head Office.
u) Verify whether claims submitted by Branch to CGTMSE and ECGC are
in time.
v) Carrying out Credit Audit in respect of the eligible cases, as per the
extant guidelines of the Bank.
w) Verify whether guarantee fee for coverage under CGTMSE is collected
and deposited with Credit Guarantee Trust Fund.
x) Verify the ratings (including CART ratings) and submission of a
certificate in writing that the ratings (including CART ratings) are found
to be correct. The discrepancies, if any, should be brought to the notice
of the bank.
y) Verify the updation of CIBIL data and report the status in the monthly
audit report.
z) Verify the details of flow of applications, time taken for appraisal of
proposals, pending applications etc. with Central Loan Processing Cell
of the RO concerned / located at the same place and report the status
in the monthly audit report.
aa) Verify whether assets have been verified by the BO within 30 days
from the date of classification of account as NPA.
bb) Verify whether the proposals covered under JICA Line of Credit
Scheme for Energy Saving Projects in MSME sector and KfW Energy
Efficiency LoC Assistance for Energy Efficiency Products,
respectively have been properly flagged in the DFS/ Flex Package.
Also to verify whether the requisite Annexures prescribed for the
purpose have been obtained and kept on record.
cc) Verify whether interest rate is charged as per approved rate of Interest.
dd) To verify whether the Memorandum of Entry for creation of mortgage
has been prepared/ pasted on Register.
C. Accounting
a) The maintenance and balancing of accounts, ledgers and registers is
proper.
b) Bank reconciliation Verification of transaction both credit and debit is
based on legitimate instruments. Comments/Confirmation on whatever
reconciliation undertaken by the dealing offices is in order.
c) Independently verify the transactions and accounts viz. receipts &
payments validated through instruments, verify the process of
reconciliation undertaken by BO of various sensitive accounts viz.
Sundry, Suspense, Receipts Pending Appropriation, bank reconciliation
etc., instead of reporting merely based on the certificates / statements
by the branch officials.
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RfP CA of Branch Operations - 2018
d) Early reconciliation of entries outstanding in the Branch with regard to
inter-branch and inter bank accounts, Suspense Account, Sundry
Deposits Account, etc. Ensure early adjustment of entries in the
Branch.
e) To ensure that all the transactions viz. receipts, payments, journal
vouchers are validated by proper instruments/ approval note, etc.
f) To ensure that all the accounting transactions are carried out in
accordance with the extant guidelines of the Bank.
g) To scrutinize quarterly trial balance codes and verify the quarterly
closing returns prepared by the Branch Office.
h) To examine and verify the appropriations done by the branch office for
the repayments received during the month. The objective is to ensure
that the appropriations done by the branches are correctly captured in
the system and are in order so that correct position of overdues / dues /
RPA etc. is reflected at the time of quarterly and annual closing of
accounts as on March 31.
D. Additional Scope for Working Capital Cases
To ensure that margin on stock/ book debts; Rate of Interest & Drawing
Power is considered / fixed as per the terms of sanction.
To ensure that the limits have not been made operational beyond the
validity period, without approval of the competent authority for
extension of the validity period.
To ensure that the periodic visits to the borrower units have been
undertaken as per the Scheme guidelines. The auditor may also
undertake some sample visits along with BO officials on random basis
and/ or on the basis of criticality of the account.
To ensure that the monthly stock statement from the borrower is
obtained in time and duly updated in the system.
To scrutinize the monthly stock statements to ensure correct valuation/
calculation of drawing power (e.g. by exclusion of non-moving /
obsolete stocks for calculation of DP and by excluding old & doubtful
book debts, margins. etc.).
To ensure that the inventories/ fully paid stocks as mentioned in the
Stock statement furnished by borrowers for calculating drawing powers
are correct and as per the books of borrower.
To ensure that the CA certified book debt statements from the
borrowers are obtained on half-yearly basis.
To ensure that stocks are adequately insured as per the extant
guidelines of the bank and are in the joint names / with bank clause
and the policies are renewed on timely basis.
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RfP CA of Branch Operations - 2018
To ensure that Quarterly Information System (QIS) statements & other
financial statements are obtained, wherever applicable and indicate the
observations on the general business operations / profitability etc.
To ensure that stock audit is undertaken, wherever applicable and to
ensure that the compliance of stock audit observations are met.
To check the correctness of upfront fee, interest / penal interest, etc.
To examine the overdue accounts closely (in terms of operations in the
a/c, Stock & Book Debt statement, Credit Summation, QIS & other
statements, Renewal, Cheque Bouncing etc.).
To ensure compliance of extant guidelines, in case of multiple current
accounts and / or multiple banking arrangement.
To verify the correctness of security (primary & collateral), Legal
compliance, ROC search etc.
E. Additional Scope for MSME-RFS Cases
To ensure end use by undertaking visits & verification of documents of
the MSME seller units.
To verify MSME category of vendors & verify sellers certificates
including KYC documents.
To ensure that the visits to the vendors' units have been undertaken as
per the extant guidelines of the bank. The auditor may also undertake
some sample visits along with BO officials on random basis and / or on
the basis of criticality of the transactions.
To verify, due date-wise, Live Bills under MSME-Receivable Finance
Scheme.
To verify whether Daily Liability Register is showing correct picture
under MSME-Receivable Finance Scheme.
To undertake visit to purchaser companies to verify the invoices under
Trade Receivables Engine for E-discounting (NTREES).
To verify seller / KYC documents under Trade Receivables Engine for
E-discounting (NTREES).
Safe custody verification as per extant guidelines.
F. Further Scope for Letters of Credit (LC) / Bank Guarantee (BG)
Check whether LCs are for genuine trade transactions and necessary
vouchers reflecting LC opening are passed by BO.
Check whether the Letters of Credit issued by the branch are within the
delegated powers.
Check that LC commission is taken correctly and necessary vouchers
passed.
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RfP CA of Branch Operations - 2018
Check whether LCs are retired in time and necessary reversal
vouchers are passed by BO.
Check whether Guarantees are issued after vetting by Legal
Department and guarantee number is auto generated from Direct
Finance System.
Check whether bank guarantees issued are properly worded and
recorded in the register of the bank. Whether they have been promptly
renewed on the due dates.
Check that correct Guarantee commission is taken and necessary
vouchers passed and Guarantee commission is appropriated quarterly.
Check that Guarantees are closed and reversed in time as per extant
guidelines.
G. Scope for Follow up & Monitoring
Verify whether Registration of charge(s) under Central Registry for all
eligible cases has been done.
Verify whether RAM / CART ratings are approved and printouts of the
same are available on record.
Verify whether Annual Review and Re-rating of the accounts as per
guidelines has been done.
Verify whether demand advices are raised correctly and sent in time as
per extant guidelines.
Verify whether Safe Custody verification is being carried out by BO as
per the extant guidelines.
Verify whether insurance cover for the assets charged to SIDBI has
been obtained/ available.
Verify whether validation of sanction / review of undisbursed sanctions
has been carried out as per extant guidelines.
To verify / review the interim disbursements / final security creations.
The above areas of operation are illustrative and not exhaustive.
4.2 The CA will have to submit the following reports to the
Management:
(A) Reports relating to Operations in Branch
(i) Monthly reports covering Branch's day-to-day operations including its
core functions such as credit appraisal, pre-sanction and post-sanction
supervision mainly under Direct Credit, Working Capital, Receivable
Finance and other operations towards finance availed by them with
regard to their correctness, compliance to the terms and conditions of
sanction, post disbursement, supervision, documentation,
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RfP CA of Branch Operations - 2018
review/renewal of limits, bills discounting, KYC norms, monitoring of
business risks, compliance of Delegation of Powers, etc.
(ii) Monthly reports covering comments on adherence to regulatory,
internal policy, procedure, guidelines, compliance of Delegation of
Powers and areas of audit as indicated at para 4.1.
(iii) Any other related report as may be required by SIDBI from time to time.
(iv) The CA shall be accountable, on its part, for wrongly verifying any
document or signing off disbursement notes or such other important
documents based on which the Bank takes a decision.
The above reports with regard to operations of the respective Branch in the
area of credit dispensation and other day to day operations should be
submitted in the following manner to the Regional Offices concerned.
Name of the Regional
Sl. Name of the
Office to whom reports Remarks
No. Branch
to be submitted
1 Tirupur Chennai Audit Report should be
submitted in the Audit
Software developed by the
Bank and duly signed hard
2 Erode Chennai copy within one week of
the reporting period for
which the report pertains.
Details of operating guidelines will be provided to the concurrent auditors.
Necessary training/ consultation required would be provided to them for
enhancing the quality of the audit. They would be made aware of the
guidelines and circulars issued subsequent to commencement of assignment
and having impact on the concurrent audit, to keep them abreast of the
changes in the operational and regulatory guidelines.
SIDBI will prescribe structured formats for the audit reports and also stipulate
the time limits for submission of the reports. The audit formats would be
reviewed on annual basis. The firm/ LLP should strictly adhere to the format
and the time limit. SIDBI may prescribe different periodicity for different
reports of the same branch.
5. Fixed Fee Structure
The fee structure / inclusion / exclusion of the BOs under this
mechanism is based on the outstanding portfolio of the BO as at the
end of previous financial year. The award of contract to CA firms / LLPs
to undertake concurrent audit will be as per fee structure issued by the
Bank from time to time. The present five slab fee structure, based on
the outstanding portfolio size, is indicated below:
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RfP CA of Branch Operations - 2018
Outstanding Portfolio Basic Fee Payable Per BOs covered
(MSME Direct Credit) Month (excluding GST) under each slab
Upto ` 100 crore ` 15,000/- Erode
Above ` 200 crore ` 30,000/- Tirupur
upto ` 300 crore
Note: Maximum upto 5% annually enhancement in remuneration may
be considered, if the contract is renewed, after one year, provided the
performance is found satisfactory.
No out of pocket expenses or traveling allowance / halting
allowance would be paid to the concurrent audit firm / LLP for
carrying out the audit. However, the service tax, education
cess/GST, etc. would be paid by the Bank, as applicable, in addition
to the basic fees. The payment to the concurrent auditors would be
subject to deduction of tax at source, at applicable rates.
The Outstanding Portfolio (MSME Direct Credit) of the BOs are
given at Table I. at para 1.1.
6. Selection Criteria for the Branch Operations including its core
functions such as credit appraisal, pre-sanction and post-sanction
supervision mainly under Direct Credit, Working Capital, Receivable
Finance, etc.
6.1 Selection Process:
This RfP will be assessed on the following Selection process :-
Invite Request for Proposal (RfP) wherein Technical Evaluation is submitted
in envelope.
Technical evaluation:
a) The Applicant is required to submit the details of its proposal in a sealed
envelope. The envelope should be superscribed "For Technical
Evaluation" for said Concurrent Audits and should contain detailed
statement giving the various technical particulars of the proposal covering
aspects of the Applicant like name and location, year of establishment,
names of its partners, staff, their qualification / experience, registration
number of the firm / LLP, details of ICAI membership / Certificate of
Practice details, methodology proposed and all other such relevant
particulars in the format given in Annexure I.
b) A pre-evaluation meeting would be held to clarify on points, if any, if
desired by the intending applicants.
c) After the expiry of time for submission of Bids / application, the
envelope containing the compliance on the "Technical Evaluation" would
be opened in respect of all the applicants to verify the compliance of the
applicants with the prescribed Technical Evaluation requirements.
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RfP CA of Branch Operations - 2018
d) The Technical Evaluation of Bids/ Application would be carried out by
SIDBI. The list of technically qualified applicants would be short listed.
Pre-Requisite for Applying
The Applicant should
furnish proof of Valid registration / Certificate of Practice from the
Institute of Chartered Accountants of India (ICAI).
be a Partnership firm/ LLP of Chartered Accountants with
minimum 3 partners of which at least 2 partners should be FCA(s).
At least one partner should have a continuous association with
the firm of a minimum of 5 years and another partner should have
a continuous association with the firm of a minimum of 3 years.
has minimum five years of previous track record of carrying out
concurrent audits in other Financial Institutions / Public/private
Sector Banks mainly in the area of credit dispensation under
Direct Credit and other day to day operations of the bank (with
documentary proof).
CA firm should get Min Score 50 Marks in Rating Chart.
CA firm having its HO or Branch Office within 500 kms from
SIDBI's Branch Office location. .
Without compliance of the above pre-requisites, the applicant will not be
eligible for applying.
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RfP CA of Branch Operations - 2018
Desirable Criteria
The Rating Chart is given below:
Sl. Maximum Marks
No. Criteria (Weightage)
i Year of establishment of Chartered Accountant firm/ Limited Liability
Partnership (LLP) of Chartered Accountants.
Upto 5 years- 10 Marks
20
5 to 10 years 12 Marks
10 to 15 years-15 Marks
More than 15 years-20 Marks
ii. Firms/Liability Partnership (LLP) of Chartered Accountants with minimum 3
partners of whom at least two should be FCA. At least one partner should
have a continuous association with the firm of a minimum of 5 years
and another partner should have a continuous association with the
firm of a minimum of 3 years. (20 Marks)
In addition to the above, firm having a retired commercial banker as Partner
/ Employee. (With Documentary proof)
( One Banker - 6 marks) 40
( 2 Bankers - 8 marks)
( 3 or more Bankers - 10 marks)
Experience of key personnel assigned (as per the curriculum viate)
1.5 marks to be awarded for each additional partner (over and above
3 partner) of the firm and 01 mark for full time CA employee (Maximum
marks-10)
iii Minimum five years of previous track record of carrying out such audits in
other Financial Institutions / Public/private Sector Banks mainly in the area
of credit dispensation under Direct Credit and other day to day operations of
20
the Financial Institution / bank (with documentary proof). 15 Marks
In addition to the above, firm having previous track record in the area of
credit dispensation under MSME 20 Marks (additional 5 marks).
iv. Whether the firm/ LLP empanelled with RBI as
Statutory Central Auditor 10 Marks
10
Statutory Branch Auditor (Category I) 7 Marks
Statutory Branch Auditor (CategoryII) 5 Marks
v. Availability of suitable infrastructural facilities including office set up, adequate
manpower who are specialized in the area of audit of Branch Operations mainly
in the area of credit dispensation under Direct Credit and other day to day
operations of the Bank. Presence in India-number of offices and permanent
manpower along with regular set-up, either Head Office or full fledged Branch 10
Offices, within 500 km from SIDBI's branch office.
Branch (locally) - 5 marks
Head Office (locally) - 10 marks
Maximum technical score 100
Page 20 of 30
RfP CA of Branch Operations - 2018
The applications received would be examined by "Applications
Opening and Evaluation Committee" which would be constituted at
Head Office Level at Lucknow.
All applicants scoring 50 marks and more (in technical Evaluation)
will be selected as the Technically Qualified Applicant. The top
three applicants getting the maximum marks in Technical
Evaluation will be given preference.
Due diligence will be carried out for the top three applicants getting
the maximum marks.
Preference would be given to the applicants where the partners
themselves are ex-bankers with requisite experience and exposure
and the firms having qualified Information System Auditor (CISA/
DISA) with necessary exposure of systems audit.
The final selection of the successful applicants from the technically
qualified applicants will be done, based on due diligence carried out
by SIDBI.
On the recommendation of the Committee, name of the successful
applicant would be identified for the Branch.
7. Terms of the contract
The selected firm/ LLP of Chartered Accountant would initially be
assigned the contract for a period of upto December 31, 2019
extendable for further two more years (extended for one year, at a
time), provided the performance is found to be satisfactory on
review and on sole discretion of SIDBI, with NOT MORE THAN 5%
increase in professional fee. The concurrent audit is likely to start
from January 01, 2019. The proposed assignment would be subject
to periodical review at the discretion of SIDBI and is liable to be
terminated at any time, if not found satisfactory, by giving a written
notice of 15 days.
8. Terms & Conditions
The applicant appointed as concurrent auditor shall nominate a CA
or retired bank officer who will head the concurrent audit team as
the "Designated Auditor" duly authorised by the FCA partner of the
CA firm/LLP to act on behalf of the firm. The Designated Auditor
would be required to submit his/her identity proof and address
proof together with specimen signatures with a request to be
allotted biometric enabled unique login ID for access to the system.
The Designated Auditor would require to log in and log out of the
system each working day. The Designated Auditor would require to
surrender the login ID on completion of the concurrent audit tenure
or on any change in the Designated Auditor by the firm/LLP.
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RfP CA of Branch Operations - 2018
The audit team composition for Concurrent Audit and attendance
requirements should be specified as under:
a) The designated FCA partner of the firm / LLP who shall visit the
branch at least 4 days in a month; and
b) Chartered Accountant / Retired Bank Officer who shall visit the
branch preferably on all working days but for a minimum of 20
days in a month; and
c) Audit assistant who shall visit the branch preferably on all
working days but for a minimum of 20 days in a month.
A declaration to be furnished by the applicant that credit facilities
availed by the firm or partners or firms in which they are partners or
directors including any facility availed by a third party for which the
firm or its partners are guarantor/s have not turned or are existing
as non-performing assets as per the prudential norms of RBI. In
case the declaration is found incorrect, the assignment would get
terminated besides the firm being liable for any action under ICAI /
RBI guidelines.
The applicant must submit an undertaking that the firm / LLP does
not have any professional relationship with any of the borrowers of
SIDBI nor will it in future accept professional relationship with any
of the borrowers of SIDBI during the period during which the firm /
LLP acts as the concurrent auditor for SIDBI.
On appointment, the Applicant shall execute undertaking of fidelity
and secrecy on its letterhead in the format prescribed by the Bank.
The concurrent auditor should adhere to the audit coverage strictly
as per the scope as may be decided by the Bank from time to time.
The concurrent auditors should not undertake any other activities /
assignment on behalf of the branch without obtaining the
concurrence of the Audit & Fraud Management Vertical at Head
Office, in writing.
The CA should attend Preventive Vigilance Committee (PVC) in the
Bank which discusses and deliberates on various operational and
administrative aspects concerning Vigilance administration in the
ROs/ BOs. The meeting of the PVC takes place at least once in a
quarter in the succeeding month of every quarter at the concerned
Regional Office of the Bank.
The concurrent auditors will co-operate with investigative body,
regarding processing or execution of the consultancy contract or
any matter related with discharge of contractual obligations.
No out of pocket expenses or traveling allowance / halting
allowance would be paid to the concurrent auditors for carrying out
the audit. However, the service tax, education cess / GST etc.
would be paid as applicable from time to time in addition to the
Page 22 of 30
RfP CA of Branch Operations - 2018
basic fees. The payment to the concurrent auditors would be
subject to deduction of tax at source at appropriate rates.
The concurrent auditors would give rating or grade to the Branch, if
desired by SIDBI.
Necessary arrangement would be made for providing space,
workstation and access to systems (viewing rights only) to the
concurrent auditors for ensuring smooth conduct of the audit. This
would be the responsibility of the Bank. The Branch In-charge
will shoulder the responsibility of the arrangements.
The Applicant shall ensure that the audit firm/ LLP or any sister /
associate concern, is not conducting the statutory audit of the Bank
or any of its branches.
The Applicant shall ensure that the audit be carried out in a
professional manner and in case of any misconduct & negligence,
the Bank may approach the concerned professional bodies with
complaints of professional misconduct, if any, on the part of any
professional engaged by the Bank. Accordingly, we may also
recommend their name to ICAI / RBI /IBA or any other authority, for
suitable action thereon by them.
The Applicant shall ensure that it will not sub-contract the audit
work assigned to any outside firm/ LLP or other persons even
though such persons are qualified Chartered Accountants.
The concurrent auditor shall be granted read only access to the
systems at the branch office.
The concurrent audit report shall be pre formatted and available on
the SIDBI's systems to the Designated Auditor who shall be
required to enter the audit findings into the system on a day-to-day
basis.
The concurrent auditor shall not be allowed to carry any mass
storage device such as pen drive/flash drive/thumb drive or any lap
top inside the branch premises as these devices will not be
required for the job. Concurrent auditors shall be provided with
computer system with disabled USB ports by the concerned
branches
The concurrent auditors are required to plan the audit that it results
in gradual shortening of the interval between a transaction and its
examination by an independent person. The concurrent auditor
shall perform substantive checking in key areas and emphasis
should be on `on the spot' rectification of deficiencies. The
concurrent auditor shall daily go through all the vouchers and
books of the branch for the previous day and identify areas to be
scrutinised in detail.
Should maintain and keep back up papers in support of
observations made.
Page 23 of 30
RfP CA of Branch Operations - 2018
Any other terms and conditions of the assignment would be
decided by the Bank on a case-to-case basis.
9. Guidelines & Instructions
i. SIDBI will endeavour to make available all relevant information in the
RfP. In case of need of any further information or clarification during
the application period, the applicant must contact only the Contact
Officer named above. On no account should the Applicants
communicate directly with any other SIDBI personnel. Failure to
comply with this requirement may result in the disqualification of the
applicant from this process of bidding.
ii. Government Tax
Applicants are responsible for establishing the status of the Services
for the purpose of any government tax including service tax, cess,
GST, etc.
iii. Alterations to Application
Any manuscript or other alteration to the RfP / Application must be
countersigned and dated by the person submitting the RfP /
application.
iv. Letters and Declaration to Accompany Applications
The RfP / Application must be accompanied by a letter on Firm/
LLP letter head showing the full registered name(s), registered
office address of the applicant. It should be signed by a person of
suitable authority to commit the applicants to a binding contract.
v. Packaging and Delivery of Applications
Applications must be delivered in a double sealed envelope clearly
labeled with the following:
1. Selection of CA for operations at ___________ BO.
2. Application Due Date
3. Applicant's Name
SIDBI accepts no responsibility for the premature opening of any
incorrectly marked Applications.
Applications must be received at Audit & Fraud Management Vertical,
Small Industries Development Bank of India, SIDBI Tower, 15, Ashok
Marg, Lucknow 226001 (U. P.) for the attention of The General
Manager by 2.00 PM on the due date. Late applications will not be
accepted under any circumstances and will be returned unopened. No
special pleadings will be accepted. Fax or e-mail applications will
not be accepted.
Page 24 of 30
RfP CA of Branch Operations - 2018
vi. Conflict of Interest
Applicants must disclose in their application details of any
circumstances, including personal, financial and business activities that
will, or might, give rise to a conflict of interest; this includes any sub-
contractor, if they were awarded this contract. Where applicants
identify any potential conflicts they should state how they intend to
avoid such conflicts. SIDBI reserves the right to reject any application
which, in SIDBI's opinion, gives rise or could potentially give rise to a
conflict of interest.
vii. Disclosures
The applicant must disclose:
a. If they are OR have been the subject of any proceedings or other
arrangements relating to bankruptcy, insolvency or the financial
standing of the applicant including but not limited to the
appointment of any officer such as a receiver in relation to the
applicant's personal or business matters or an arrangement with
creditors or of any other similar proceedings.
b. If they are OR any of the applicant's staff have been convicted of,
or are the subject of any proceedings, relating to:
a criminal offence or other offence, a serious offence involving
the activities of a criminal organisation or found by any regulator
or professional body to have committed professional
misconduct.
corruption including the offer or receipt of any inducement of any
kind in relation to obtaining any contract, with SIDBI, or any
contracting authority.
failure to fulfill any obligations in any jurisdiction relating to the
payment of taxes or social security contributions.
Disclosure extends to any entity in the same group of the applicant
(including but not limited to parent subsidiary and sister companies,
and companies with common shareholders whether direct or indirect
and parties with whom the applicant is associated in respect of this
application / RfP).
If an applicant or related entity or any individual discloses details of any
previous misconduct or complaint, SIDBI will seek an explanation and
background details from them. At the sole discretion of SIDBI and
assessment as to whether the Applicant will be allowed to submit a
application, decision will then be made by SIDBI.
Page 25 of 30
RfP CA of Branch Operations - 2018
viii. Indemnity
The successful applicant shall exercise reasonable skill, care and
diligence in the performance of the assignment and indemnify and
keep SIDBI indemnified in respect of any loss, damage or claim
howsoever arising out of or related to breach of contract, statutory duty
or negligence by the firm/ LLP or its staff, agents or sub-contractors in
relation to the performance or otherwise of the Services to be provided
under this Contract.
ix. Assigning to Others
The successful applicant shall not, without the prior written consent of
SIDBI, assign or transfer or cause to be assigned or transferred,
whether actually or as the result of take over, merger or other change
of identity or character of the CAs, any of its rights or obligations under
the Contract or any part, share or interest therein. Upon any such
assignment or transfer, this engagement may forthwith be terminated
by SIDBI.
x. Termination
SIDBI may, at its sole discretion and at any time after giving 15 days
notice can terminate the Contract and inform the CAs of SIDBI's
decision by written instruction to that effect. In the event of the Contract
being so terminated, the firm/ LLP shall take such steps as are
necessary to bring the Services to an end, (including terminating any
sub-contracts placed by the firm/ LLP) in a cost effective, timely and
orderly manner. No further correspondence will be entertained in
this regard.
@@@@
Page 26 of 30
RfP CA of Branch Operations - 2018
Annexure I
Technical Evaluation for Concurrent Audit of Branch Operations
A) Audit Firm / LLP Details:
Sl.
Requirements Remarks
No.
1 Name of the Chartered Accountant Firm/ LLP with year of establishment.
2 Registration Number / Certificate of Practice from the Institute of Chartered
Accountants of India (furnish documentary proof, Registration should be valid).
3 Knowledge and experience in carrying out audit of Branch Operations mainly in the
area of credit dispensation under Direct Credit and other day to day operations.
4 Details of every partner including experience, qualification etc. and their Registration
number with CA Institute (furnish a detailed list of all the partners)
Sl. Name of the Age Educational Experience Period of Association
No. Partner Qualification with the firm
5 Previous track record of carrying out such audits in other Financial Institutions / Public
Sector /Private Sector Banks mainly in the area of credit dispensation under Direct
Credit/MSME for last 5 Financial Years and other day to day operations of the
Financial Institution / bank (furnish documentary proof)
6 Whether the firm/LLP empanelled with RBI (furnish documentary proof).
7 Availability of suitable infrastructural facilities including office set up (Branch office/
Head office at location of SIDBI's Branch or within 500 kms from SIDBI's branch office
may be specifically indicated), adequate manpower who are specialized in the area of
audit of Branch Operations mainly in the area of credit dispensation under Direct Credit
and other day to day operations of the Financial Institution / bank. Competence and
qualification of key professional staff who shall carry out the assignment in a time
bound manner (furnish a detailed list of all the skilled / semi skilled employees /
staff).
8 Whether the firm has a retired commercial banker as Partner/ Employee. If `YES'
furnish details as under :-
Sl. Name of Name of Designati Present Qualificati Experience Period of
No. the the bank on at the Age on Associati
Partner/ from time of on with
Employee where retirement the firm
retired
9 Whether the audit firm/ LLP or any sister / associate concern is conducting the
statutory audit of SIDBI or Concurrent Audit in any of SIDBI branches.
Page 27 of 30
RfP CA of Branch Operations - 2018
Note:
1. All the relevant details & documentary evidences are to be furnished.
The above is only a format. Information may be submitted in
additional sheets.
2. The following declaration/ undertaking shall be furnished by the firm
a) The firm/ LLP shall agree to execute undertaking of fidelity and secrecy on its
letterhead in the format prescribed by the Bank, if the contract assigned.
b) A declaration to be furnished by the firm that credit facilities availed by the
firm or partners or firms in which they are partners or directors including any
facility availed by a third party for which the firm or its partners are guarantor/s
have not turned or are existing as non-performing assets as per the prudential
norms of RBI. In case the declaration is found incorrect, the assignment
would get terminated besides the firm being liable for any action under ICAI /
RBI guidelines.
c) The firm / LLP must submit an undertaking that the firm / LLP does not have
any professional relationship with any of the borrowers of SIDBI nor will it in
future accept professional relationship with any of the borrowers of SIDBI
during the period during which the firm / LLP acts as the concurrent auditor
for SIDBI.
B) Details of Concurrent Audit of Branch Operations mainly in the
area of credit dispensation done in banks / FIs.
1. Details of Statutory Branch Audits (Category I / II) of various banks'
branches
Year of Audit / Period (From -
Sr.
Name of the Bank Branch To) [Data required for the past
No.
10 years of your firm]
2. Details of Concurrent Audits of various banks' branches
Year of Audit / Period (From -
Sr.
Name of the Bank Branch To) [Data required for the past
No.
10 years of your firm]
3. Details of Statutory Central Audits (Category - I) of various Banks
Year of Audit / Period (From -
Sr.
Name of the Bank Branch To) [Data required for the past
No.
10 years of your firm]
Page 28 of 30
RfP CA of Branch Operations - 2018
Declaration
(to be furnished in the letter head of the firm/ LLP)
We hereby declare that the information submitted above is
complete in all respect and true to the best of our knowledge. We
understand that in case of any discrepancy or inconsistency or
incompleteness is found in the information submitted by us, our
application is liable to be rejected.
Date: Authorised Signatory
Page 29 of 30
RfP CA of Branch Operations - 2018
Declaration of Eligibility
(to be furnished in the letter head of the firm/ LLP)
I/We _______________________________Chartered
Accountants hereby declare that I/We comply with the eligibility conditions
specified established under the Chartered Accountants Act, 1949, and I/We
declare that:
None of the Partners of the firm have any disciplinary proceedings under the
Chartered Accountants Act, 1949 pending against him/her or any disciplinary
action under the Chartered Accountants Act, 1949 / penal action under any
other law taken / pending against him/her.
It is further confirmed that the firm is not the Statutory Auditor of Small
Industries Development Bank of India (SIDBI).
None of the Partner of the firm holds any shares or other securities (including
options or futures) in Small Industries Development Bank of India (SIDBI).
Our firm will continue to satisfy the eligibility norm for appointment of
Chartered Accountants as Concurrent Auditors as prescribed by the Bank
from time to time.
I/ We understand that any breach of the provisions regarding
eligibility shall be considered as gross negligence and may result in
appropriate action under the Chartered Accountants Act, 1949.
For ________________________
Chartered Accountants
Place: ______________
Date: _______________
Partner
Page 30 of 30
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