The Agency for Specialised Monitoring Services ensures compliance and safety across various industries. As we enter 2019, the Indian banking industry faces a huge distress debt crisis. Indian banks endured great distress in the debt crisis 2019, which forced them to face a huge capital infusion crisis to survive.

As a result of aggressive lending to the Infrastructure Sector in the aftermath of the Great Recession of 2008-2010 to prop up the Indian economy, as well as fraud and dial perversion of funds, the Indian Banking Sector ended up with a substantial amount of deteriorating debt due to several other factors, including fraud and diversion of funds.

The government of India, to keep a close eye on fraudulent activities and prevent the diversion of funds, has introduced the ASM Services mechanism.

What is the Agency for Specialized Monitoring?

The Agency for Specialized Monitoring(ASM) is an external agency that monitors huge credit exposures and advances made by banks/consortiums of banks. Consortiums are formed when banks come together to sanction the limits for a specific purpose. A consortium always has a lead bank with the majority of power. Whenever a consortium of banks is involved, the lead bank selects any particular agency and assigns it to monitor accounts.

As a mechanism of a bank, the Agency for Specialized Monitoring (ASM) allows it to take various measures to minimize money laundering cases and misappropriation of funds. In India, ASMs are committed to providing due diligence support. In banking, due diligence services involve conducting an in-depth investigation and analysis of the company's finances, assets, and liabilities. To ensure the deal is lucrative and safe, a bank initiates an acquisition or offers a loan to a customer before investing or finalizing a transaction.

Why the Agency for Specialised Monitoring Services?

According to the RBI, with 90% of frauds occurring in bank credit portfolios, frauds have emerged as the most serious concern in managing functional risk. The RBI took action after ever-increasing frauds, and the amount of non-performing assets in India increased drastically, introducing new reforms, such as Agencies for Specialized Monitoring services in India. The bank's cash flows are monitored and regulated by 83 agencies appointed by the Indian Banks' Association (IBA).

The ASM consulting services are essential for organisations to maintain their operations' compliance, safety, and efficiency. With the increasing complexity of regulatory requirements and the growing need for real-time monitoring, ASMS provides expert support through its expertise and advanced technological solutions. The services ensure businesses can swiftly identify and address potential issues, minimising risks and avoiding costly non-compliance penalties. 

Moreover, ASMS's comprehensive reports and expert recommendations empower organisations to make informed decisions, optimise processes, and uphold a high standard of operational integrity, making them a crucial partner for any industry striving for excellence and reliability.

Purpose of the Agency for Specialized Monitoring

With the effect of reporting under the Agency for Specialized Monitoring (ASM) will require banks to appoint specialised monitoring agencies that will help us determine problems in advance, such as inventory buildup, receivable delays, and fund diversions, and closely monitor the activities of debtors (borrowers), including purchases/invoices, actual production versus projections, transactions/payments of high value based on beneficiaries and purposes, and cash flow in/outflows. 

There will be strict vigilance over all transactions. Since banking employees need more expertise in all sectors and related business transactions, ASM services are required to closely track the activity of each stage of the borrower's complex transaction.

Agency for Specialised Monitoring Services will be applicable on which debtors.

The ASM Services will apply to all debtors with exposure over Rs.250 crores. The scope of works included are as follows:

• Monitoring deviations and fluctuations regularly.

• Monitoring of cash flow and transactions.

• Inputs and outputs of the organization are analyzed.

• Verifying that funds have not been misappropriated or diverted.

• Maintaining compliance with sanction terms and conditions.

• An in-depth analysis of a company's operations, finances, and transactions.

• Taking a closer look at the Fund Flow Statement.

An Agency for Specialized Monitoring (ASM) is a company whose Chartered Accountants have extensive domain knowledge, experience, and expertise in various sectors, industries, etc. In large or specialized exposure cases, such agencies provide inspections, stock audits, cash flow monitoring, and end-use verification.

R.K Associates: Your Specialized Monitoring Experts

The Indian Banks' Association (IBA) has enlisted R.K Associates as an agency that will offer consulting services to banks and organizations with large credit exposures and specialized exposures. 

With a wide range of skills, experience, and domain knowledge across a wide range of sectors and industries, R.K Associates has a team of professional chartered accountants who can provide:

• Inspection services.

• End-user facility evaluation.

• Progress of project implementation.

• Projections versus actuals. 

So, are you looking to ensure compliance, safety, and efficiency with your banking operations? Trust R.K Associates, the experts in Specialized Monitoring Services. Our team of professional Chartered Accountants brings extensive domain knowledge and experience across various sectors. 

We offer comprehensive monitoring services, including inspection, cash flow monitoring, and risk assessment, to help you navigate complex transactions and maintain operational integrity. Contact us today to safeguard your financial interests and ensure your business's success.

Contact us to Learn More.

Call us at (0120) 4110117, 4324647, +91-9958632707) or email us at valuers@rkassociates.org  to discuss your needs.