Banks to review computation of liabilities
By Our Banking Bureau | 11 Sep 2004
Mumbai: The Reserve Bank of India (RBI) has asked all banks to immediately undertake a special scrutiny of the computation of their demand and time liabilities (DTL) to ensure that these are worked out strictly in tune with the extant instructions on the subject.
The RBI directive follows detection of deficiencies in the computation of DTL by some banks. Correct computation of DTL is important as maintenance of CRR (cash reserve ratio) and SLR (statutory liquidity ratio) by banks were calculated on the basis of DTL.
In a circular to all scheduled commercial banks, the RBI said that internal or external auditors might be engaged for scrutiny. The banks must arrange to submit revised forms detailing deficiencies observed in the computation of DTL / NDTL based on the outcome of the scrutiny.
The RBI noted that in case of absence of deficiencies, banks might forward to the RBI a certificate signed by the internal or external auditors and the bank's CEO to the effect that the DTL / NDTL is being worked out strictly in accordance with the instructions issued by the RBI from time to time. The time period of submitting such a certificate is one month from the date of issue of this circular, said the notification.
