1.Computer print outs
Different banks have different computers systems and produce different printouts.
However all of them have the capacity to supply historical information of the trend on
individual customers’ accounts. When looking at this information the main questions
which should be asked are:-
i) What is the worst balance trend?
ii) What is the best balance trend is there any evidence of a hardcore developing?
iii) Is the average balance figure worsening?
iv) Is the turnover through the account out of line with what might have been
expected?
v) Has there been a change in the run of account compared to previous years.
An adverse trend in one of this need not to be a cause of concern but when deterioration
is evident in more than one then some action maybe necessary even if its limited to
keeping the account under more regular review.
2.Customer statements sheets
Customer statement information tends to be standard among banks. The information
given / produced is to give the customer an account of individual debits and credits and is
not therefore an ideal form for bank monitoring purposes. Specifically produced
computers printouts maybe more user friendly. The question which an examination of
statements will help answer includes:
i) Is there any pressure on an overdraft limit? Or is the account working satisfactory
and showing healthy fluctuations?
ii) Does the balance give a true picture or it has been distorted by unusual amount?
iii) Is the turnover through the account rising sharply this might be evident of cross
firing?
iv) When are credits received? Is the monthly salary been received regularly?
v) To whom are regular payments out of account paid?
vi) Is there any change in character of the account?
vii) Are there any unusual items passing through the accounts?
3.Entry vouchers
An examination of all debits and credit through a customers account may be time
consuming and lender needs to be selective, efforts should be concentrated on:
a) Those accounts which require special attentions.
b) Entries for large amounts
An examination of debit entry will show:-
a) Evidence of customer interest and financial activities e.g. borrowing – payment to
hire purchase company or other finance companies associates – membership fee
to clubs or payments to charitable organizations.
Thrifts – regular payment to saving institution and insurance companies.
b) Whether borrowing is being used for purpose agreed.
This may not represent a problem but it gives evidence of customer truthfulness and
might be a cause of concern. An examination of credit will show:
a) Source of customers’ income, salary, divided.
b) Suspicious transactions. Can large cash receipts be explained?
c) Whether uncleared effect are possibly going to be a problem.
sharon kalunda answered the question on March 7, 2019 at 14:02