Irregularities in SB and SBCO Branch Operations Highlights

Quarterly Report Highlights Irregularities in SB and SBCO Branch Operations

The Office of the Postmaster General, South Karnataka (SK) Region, Bengaluru, has released a quarterly report addressing significant irregularities identified during inspections of Savings Bank (SB) and Savings Bank Control Office (SBCO) branches by the Assistant Accounts Officer (AAO), Internal Check Organization (ICO). This report covers the findings for the quarter ending September 30, 2024, emphasizing the need for compliance with procedural norms and financial guidelines.

Key Irregularities Identified:

1. Non-Attestation of Deposit Vouchers:
   Many Sub Postmasters (SPMs), Branch Postmasters (BPMs), and Counter Postal Assistants (PAs) are failing to attest deposit vouchers during cash transactions.

2. Irregular Cash Withdrawals for Illiterate Depositors:
   Withdrawals by illiterate depositors lack adherence to prescribed procedures, especially when valid documents are not provided.

3. Errors in Reversal Transactions:
   Copies of error entries are not being sent along with vouchers or consolidations during reversal or incorrect transactions.

4. Application Form Discrepancies:

   • Nomination details are often left unattested by APMs/SPMs.
   • PAN numbers for high-value deposits are frequently missing.
   • Date of Birth is not recorded for SSA, PPF, and SCSS accounts.
   • Depositor KYC documents lack self-attestation, and high-risk deposits lack address verification by divisional heads.

5. AML/CFT Norms Violations:
   Many post offices are not adhering to Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) norms.

6. Improper Maintenance of AOFs:
   Account Opening Forms (AOFs) are not being stored securely using ring guard folders in most post offices.

7. Fee Collection Recordkeeping:
   Details regarding fees collected for account transfers, duplicate passbooks, and account pledging are unclear in the Finacle system, complicating traceability.

8. Stock Balance Discrepancies:
   Cheque books and ATM kit stock balances are not being updated in Finacle. A provision for updating stock positions through SAP is recommended.

9. Outdated Forms Usage:
   Old forms are still being used for silent account revival and issuance of duplicate passbooks, violating updated norms.

10. Unverified and Deleted Transactions:
    Numerous post offices exhibit unverified and deleted transactions in Finacle.

11. Non-Adherence to POSB (CBS) Manual - 2021:
    Registers prescribed under the POSB (CBS) Manual are not being maintained properly.

12. Pending SBCO Objections:
    A significant backlog of unresolved objections from the SBCO branch has been observed. As of June 30, 2024, there were 8,658 objections pending resolution:
    • Over 1 year: 1,139 cases
    • 6–12 months: 3,805 cases
    • 3–6 months: 1,045 cases
    • Below 3 months: 3,555 cases

13. Outstanding Balances in Office Accounts:
    Substantial outstanding amounts are recorded in various office accounts, including those for outward clearing, subsequent deposits, sundry deposits, and PPF transit.

Recommendations:

The SK Region has directed divisions to ensure adherence to POSB rules and guidelines, address pending objections, and maintain accurate records and procedures. Compliance with AML/CFT norms and proper documentation is emphasized to enhance operational efficiency and reduce irregularities.

This report serves as a crucial reminder for all post office divisions under the SK Region to address these gaps promptly and maintain procedural integrity.