Check all entries for authorities, powers of attorney, etc., with list of authorities held.
See that proper entries have been made in deposit receipt account in the general ledger for all receipts issued and paid since last inspection.
Examine indorsements on receipts paid since last inspection, and see that they are tied up and sealed with the inspector's private seal.
Examine powers of attorney, resolutions and documents respecting signing officers.
Check date of last certification of each ledger balance.
See that certificates are properly filled in and signed.
Compare inspection liability sheets prepared by the staff with liability ledger.
Examine entries in cash item register since date of last inspection, noting any items outstanding an undue length of time.
Ascertain if any items have been put thru as cash items which should have been shown on discount return as trade bills remitted.
See that the following books and records, etc., are properly kept:
Record of lost drafts, stopped checks, etc.
Overdue debt register
Record of examination of bank premises
Character card file
Receipt for duplicate keys, etc.
Record of mercantile agency reports received.
The following lists and statements are prepared by the staff and handed to the manager or accountant, and when checked and completed by them given to the inspector:
Assignments of goods
Balance sheet, general ledger
Bank premises, safes and vaults
By-laws, minutes, etc., list of
Comparative statement of condition of branch
Current account balances
Deposit receipts outstanding
Drafts issued accounts
Insurance policies held - fire
Insurance policies held - life
Letters of credit outstanding
Letters of guarantee
Liabilities of customers
Past due bills, list of
Powers of attorney, list of
Reports on officers
Sterling exchange purchased and current
Trade bills remitted, summary of
Verifications, current accounts
Verifications, letters of credit
Verifications, trade and collateral bills remitted
Warehouse receipts, loans on
This return shows every liability in detail whether overdue or not. The names of all obligants should be in strict alphabetical order, and the totals of the loans and trade bills in each account should be shown in the proper column opposite the names of the customers. All securities should be shown in detail with the manager's estimate of values. The following information should appear in the report on each important account:
Names and ages of individuals or partners
Head office authorization and expiry date of credit
Total fire insurance carried both on liquid and fixed assets, and the amount, if any, assigned to the bank
Remarks regarding customers' wills or deeds of partnership, having reference to the way in which the bank would be affected by the death of the customer
In reporting on farmers' and other casual loans, the original date of the transaction must be given, if any portion of the advance has been running for more than twelve months. The object of the loan, time of repayment and source from which the money is to come, should also be stated
The purpose for which a loan has been granted and the source of repayment should be stated - also the probable course of the advance, unless payment is assured at maturity.
In connection with all important accounts the following points should be fully discussed with the manager by the inspector, and the significant features made the subject of correspondence:
Moral character, habits, and business ability
State of health
Life insurance carried
Is financial progress satisfactory?
Fluctuations in liability and reason for any substantial increase - highest and lowest points of advance monthly for past year
Promptness in meeting obligations
Obligations in connection with interests outside the business, if any
Titles to, and liens or mortgages on property, information, researches, etc.
Value of collateral held
Value of the account or the connection
Any special features or influences which are likely to benefit or be detrimental to the customer or the business.
If a wholesale house:
Distribution and classification of risks in credits to customers, also any recent or anticipated losses Financial responsibility of largest customers Percentage of bills returned unaccepted or unpaid.
Having fully discussed all the outstanding features in the different accounts with the manager, the inspector is in a position to offer a reasonably close valuation of all the accounts, which he does according to the following ratings:
Accounts regarded as desirable, but which do not liquidate satisfactorily
Business desirable because of the connection or local conditions, but not on its merits otherwise
Undesirable but probably collectible
Locked up but eventually collectible
Marginal loss probable
A. Secured by mortgage, etc.
B. Interest being set aside as a contingent fund
C. Not producing interest.
On his return to the head office, the inspector takes up with the branch and records by correspondence any objectionable features in the accounts, which he thinks require adjustment or comment.