Bank Treasury Operations Audit Checklist
BANK TREASURY OPERATIONS AUDIT CHECKLIST
Bank: {{client_name}} · Treasury/dealing unit: {{branch_name}} · Period: {{period_end}}
Purpose: to test the bank's OWN treasury function — its investment portfolio, statutory reserve compliance, and dealing-room operations — as distinct from a corporate borrower's internal treasury and cash-management controls (see the related Internal Audit checklist for that separate context). Bank treasury carries statutory reserve obligations (SLR/CRR) and portfolio-classification rules that a corporate treasury does not.
A. Investment Portfolio Classification (HTM / AFS / HFT)
- Securities classified at acquisition into Held to Maturity (HTM), Available for Sale (AFS), or Held for Trading (HFT) per the bank's board-approved investment policy and RBI's Master Direction on classification, valuation and operation of investment portfolios.
- HTM ceiling (the RBI-prescribed maximum proportion of the total investment portfolio, if applicable to this bank category) not breached; any shifting of securities out of HTM tested for the limited permitted circumstances and board approval.
- AFS/HFT securities marked to market at the prescribed frequency (HFT more frequently than AFS) with depreciation/appreciation recognised per the applicable accounting norm — no HTM-style cost-carrying applied to AFS/HFT holdings.
- Shifting between categories (HTM↔AFS↔HFT) tested for board/ALCO approval and correct application of the "lower of cost or market value" or equivalent transfer-pricing rule at the shift date.
B. Statutory Reserve Compliance (SLR / CRR)
- Statutory Liquidity Ratio (SLR) maintained at or above the RBI-prescribed minimum on the relevant reporting Fridays, computed on the correct Net Demand and Time Liabilities (NDTL) base.
- Cash Reserve Ratio (CRR) balances maintained with RBI per the prescribed daily/fortnightly average requirement; any shortfall tested for correct penal-interest computation and reporting.
- NDTL computation itself tested for completeness — no understatement of demand/time liabilities that would understate the SLR/CRR base.
C. Dealing-Room Controls & Segregation of Duties
- Front office (dealing), mid office (risk/limit monitoring) and back office (settlement/confirmation) are organisationally segregated — no dealer independently confirms or settles their own trades.
- Deal tickets/blotters reconciled against counterparty confirmations and the core banking / treasury system on a same-day or next-day basis; unmatched or overdue confirmations escalated.
- Dealer-wise and counterparty-wise exposure limits monitored in real time (or near-real-time) against sanctioned limits; breaches reported through the ALCO/risk-management structure, not merely noted after the fact.
- Recorded-line/call-monitoring controls in place for the dealing room, per RBI's treasury operations guidelines, with periodic review of recordings for unusual patterns.
Overall conclusion on treasury operations: ____________________________________________
Prepared by: ____________________ Reviewed by: ____________________
Date: 31 July 2026
