Page 38 - A Banker Down the Rabbit Hole

loan accounts had been applied as per their category along with accuracy
of calculations of interest amount. This was intended to check leakage
of revenue due to above twin errors which might have large cumulative
impact on the bank balance sheet on the whole.

This was a branch where I had worked already in recent past, as a Loan
officer. I had full one day to check all the major accounts. So, I decided
to check first all the high value accounts (100%) and spend the remaining
time left for random 20% checking of other small accounts to manage
my day effectively. I took the loan ledgers having all high value category
wise loans. The first ledger I happened to check was by chance the same
where I had detected the error in calculation by a calculator when last
time I had worked at this branch.

I first went to the same account and checked the calculation of four
quarters of the last year under the ambit of this revenue audit. I found
the same mistake for one quarter of the year. The interest applied was
one tenth of the actual interest. The amount debited was around Rs.
4500/- instead of Rs. 45000/-. There was a difference of Rs. 40,500/- in
that quarter. This was considered a big amount compared to value of
money today. This was the single biggest error. Some other cases involved
application of wrong rate of interest. Rectification vouchers of substantial
amounts were passed and debited to various accounts. I was satisfied that
I had done my duty as per objective of revenue audit.

Insights from the episode
1. We need not buckle under the euphoria of accurate checking with
calculator or by someone who is deemed perfect in calculations.
2. Calculations or workings involving financial matters even if done with
help of calculator must be double checked, come what may.
3. There is always a possibility of error by one person and better
possibility of detection of error by the second independent person
who checks these workings.

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