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Memo - Standard Operating Procedure For Transactions in Suspense Accounts

1) The document outlines standard operating procedures for transactions in suspense accounts at a bank. 2) Suspense accounts are used to temporarily hold unclassified transactions until they can be properly accounted for. 3) The document lists specific suspense accounts and provides guidelines for clearing balances in a timely manner to avoid potential risks.

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Sairajesh Gourishetty
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289 views

Memo - Standard Operating Procedure For Transactions in Suspense Accounts

1) The document outlines standard operating procedures for transactions in suspense accounts at a bank. 2) Suspense accounts are used to temporarily hold unclassified transactions until they can be properly accounted for. 3) The document lists specific suspense accounts and provides guidelines for clearing balances in a timely manner to avoid potential risks.

Uploaded by

Sairajesh Gourishetty
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Memo No.

103/2019/BC/AC–06
12th September 2019

Standard Operating Procedure for Transactions in Suspense Accounts

A Suspense Account is an account where unclassified transactions are accounted for a short
period. There are several situations for holding an entry under suspense account. Example:
partial payment not enough to cover the commitment fully; TDS collected from
contractors/vendors/staff salary till the period it is remitted to CBDT; unable to identify the
account or customer from whom payment is received; unable to classify a transaction etc.
Following are the Suspense Receipts classified and maintained in our Bank.

3898 TDS Recovered from Contractors/Vendors


3900 Suspense Receipts General – Miscellaneous
3902 TDS Recovered from Staff
3921 RTGS Suspense
3922 NEFT Suspense
3924 CASA Initial Remittance
3950 Salary Suspense Receipt
3963 Suspense – Progacap
3991 Excess Cash
62003 Suspense Receipt EC (unsuccessful ATM/POS transactions)

Most suspense accounts are cleared out on a regular basis. Under inevitable situations, the
suspense accounts can remain outstanding for a long period. However, such situations
should be avoided as far as possible because, maintaining an amount under suspense
account is always associated with a potential risk of loss of revenue and/or good will.

To have control in maintenance of payments from Suspense Receipts, it is thought fit to


draw out a standard operating procedure.

1. Deduction of Tax at Source is a mandatory requirement of the persons responsible of


making payments to deduct tax beforehand and deposit it with the Government. It
should be ensured that the TDS collected for a month is remitted to CBDT before the
stipulated date on the succeeding month. Under no circumstances any amount
collected on account of TDS should remain unpaid after the stipulated period.

CSB Bank Ltd


(Registered Office: Thrissur)
Accounts Department, Head Office, Thrissur
e-mail: [email protected]
CSB … Support all the way
2

GL head wise reconciliation to be prepared and kept at branches for audit purpose
and Internal Auditors / Concurrent Auditors are expected to verify the same.

2. Fund received through RTGS/NEFT should be credited to the account of the


beneficiary immediately. The practice of maintaining the same under Suspense
Receipts should be avoided. Please note that if the fund received through
RTGS/NEFT do not relate to the branch, the same has to be returned within 2 hours
from the time of receipt. The risk of maintaining such fund with the branch beyond
the stipulated time of return lies with the branch.
3. CASA Initial Remittance collected from the new clients and maintained under
Suspense Receipt should be transferred to the new account of the clients. After the
account is opened, it should be ensured by the branch that the amount collected and
kept under Suspense Receipt account is completely eliminated and the balance is
zero. If, in any case, the account could not be opened, the initial remittance should
be returned to the customer within the period as stipulated by CASA/CPC from time
to time.
4. Cash found in excess and kept under Suspense Receipts should be eliminated as far
as possible on the succeeding days itself by identifying the remitter. Such payments
shall be made to the account of the customer by way of transfer/NEFT/PO/DD etc
and not by cash.
5. Cash found excess in ATM should be identified in consultation with ATM Centre.
6. Suspense Receipts of general nature should be traced to the beneficiary on the next
working day itself wherever possible.
7. Payment from Suspense Receipt should be authorised by the Principal Officer of the
branch/department. All payments from Suspense Receipts should be by way of
account transfer and should not be by cash transactions.
8. Suspense Receipt entries pending for more than one year should be transferred to
Head Office on 15th of May and 15th of November every year (subsequent working
day if these days fall on holidays).

(V Maheswari)
Chief Financial Officer

To All Offices

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