CHECKLIST FOR INSPECTION OF UNITS

CHECKLIST FOR INSPECTION OF UNITS
1 Take a copy of the latest Stock Statement of the Unit & also the immediate previous
stock statement.
2 Ensure that If limits granted on the basis of book debts, then list of Debtors (classified
age-wise / country-wise)
3 Make a Note of the details viz.
a) The Latest Limit
b) Drawing power
c) Outstanding
d) Notes on the promises made during last visit & notings made during the last
inspection
e) Average Sales (Monthly) as per “projections’ given
f) No. of Shifts / Average employees during each shift
g) Average Creditor and Debtor Level
h) Rejection Level / Sales Returns data
4 Observe & make a note of the present ‘Activity level” at the Unit (No. of shifts worked,
Avg. No. of employees, Sales, Creditor elves, Debtor level) & compared with the
previous levels
5 Ensure that all the machineries are in effective use.
6 a
6 b
Ascertain any machinery discarded if so How the Sale Proceeds were utilized
Similarly ascertain if any machinery has been purchased new – if so what was the
source of funds for the purchase.
7 Observe about the labour situation and also make casual but purposive enquiries
thereon.
8 Notice the Key change in Management Positions within the Unit.
9 Observe the Production levels & make a critical comparison with the “Projections”. If
substantial variance observed, then reasons for the shortfall ascertained and made
note of.
10 Note the quantity of Rejections / Sales returns, ascertain reasons, compare with data
for the previous month / quarter.
11 Notice the Average Sales levels and make a critical comparison with the ‘Projections’ /
check for the reasons.
12 Conduct a random check of the stocks with focus on
a) The present levels of stocks - should commensurate with production cycles
b) Quantity of slow-moving items - should be minimum or nil
c) Inclusion of obsolete items as part of stocks – should not be done
d) Sudden but phenomenal increase / decrease in stocks in comparison to those
as per latest stock statement – the reasons should be clarified with the
borrower
13 Ensure that the ‘Statutory Dues” like PF, ESI, Sales Tax, Income Tax, Property Tax,
EB dues etc have been paid and are evidenced by presence of receipts thereof on
record.
14 Observe that books of accounts are written-up, up to date.
15 If accounts remain irregular, then a meaningful discussion on regularization of
accounts to be held with borrower / executives.
16 Make a note of any difficulty in verifying stocks / book debts or in carrying out
inspection at the Unit.
17 Ensure that The commitments given during last inspection have been met or
acceptable reasons for not meeting the commitments given.
18 Ensure that the suggestions given by the Bank during last inspections have been
implemented.
19 Record any positive / negative developments that are likely to befall the Unit.
20 Discuss the adverse features observed during Inspection with the borrower /
executives of the Unit.
21 Submit the observations regarding the inspections holistically to the next higher
authority in the prescribed format and in time.
22 Ensure to record the visit in the Inspection Register maintained at the Bank as well as
in the Unit Inspection Register at the Unit and NOT in any other forms / registers of the
Unit thereat.