The specific deadline for a corporate borrower to submit its audited accounts to its lenders (banks) is usually a condition stipulated in the individual loan agreement or the terms of sanction.
- Banks generally require these statements soon after they are finalized and before the statutory filing dates to monitor the borrower’s financial health, compliance, and asset quality.
- The Reserve Bank of India (RBI) mandates that banks and Non-Banking Financial Companies (NBFCs) themselves have internal timelines for receiving and reporting financial data from their borrowers (e.g., reporting Red Flag Accounts to CRILC – {CRILC stands for Central Repository of Information on Large Credits, a database maintained by the RBI to collect, store, and share information on large credit exposures of borrowers} within 15 days of identification).
In summary, while there are statutory deadlines for filing with the government, the most direct “last date” for submission to a specific bank will be found in the covenants of your loan agreement, which typically align with or precede the statutory due dates.
Deadlines for Submission of Audited Statements to Banks
There are different combinations / rules, which are Bank specific and they define the date by when they expect the corporate borrower to submit the audited accounts. Predominantly, the following are largely used combinations:
- Within 6 months from the end of the Financial Year
- Within 30-60 days of last date of getting the audit completed
- Within 30-60 days of signing of the Audited Accounts by the Auditor
- Within 5 days of signing of the Audited Accounts by the Auditor
- Within any specific date like (before 30th Sep / 31st Oct / 30th Nov / 31st Dec)
Penalties for Late Submission of Audited Statements
In case of non-compliance, the Bank has laid the provision of charging penal charges; the same may vary from 0.25% to 2% of the loan amount. In certain specific cases, an absolute penalty of Rs. 25k / 50K may also be levied.
Not only that, even the existing rate of interest is increased by 0.5% to 1% approx till such documents are submitted to the Banks (i.e. for the delayed period).
Hence, it is extremely prudent to take this particular compliance very seriously and save yourself from unnecessary harassment and costs.
Bank-wise Compliance Parameters and Penalty Chart – A Sample
Please find below a sample table of the policies followed by different Banks for different types of borrowers alongwith its consequent implications
Bank Name |
Parameters |
Penal |
| Yes Bank | Borrower(s) to furnish to the Bank, provisional Balance Sheet and Profit & Loss Account within 45 days of end of each Financial Year and audited accounts within 6 months from the end of each Financial Year. | Attracts penal charges @2.00% on average utilization of the Facilities payable monthly during the period of non – compliance. |
| Karnataka Bank | Submission of AFS on or before 31st Oct 20xx | 1.00% on outstanding amount p.a over and above the sanctioned interest rate. |
| PNB Bank | Non Submission of Audited Financial Statements for current FY by 31st December 20XX | 2% p.a on Outstanding Amount over and above the rate charged |
| Karnataka Bank | Non submission of Financial Statements Before 31st October | 1.5% on Outstanding Balance |
| Federal Bank | Non – submission of audited financials within the prescribed timelines. | 2% p.a. on the balance outstanding from the due date for submission specified in Sanction Order (SO). |
| HDFC Bank | Delay or non- submission of Annual Financial Statement | would result in additional interest of 2% on the outstanding amount being charged to the Borrower |
| BOI | Submission of Audited Financials | Before 30th Nov – 1% p.a on o/s amount |
| BOI | Delay in submitting audited financials i.e. beyond 6 months from end of the FY | to be charged @1.00% P.A. for delayed period |
| Axis Bank | Delay in Submission of Audited Financials by 31st Dec 20xx | Minimum 1.00% p.a maximum 4.00% p.a |
FAQs
Is there a penalty if audited financial statements are not submitted on time?
Non submission of financial statements on time is a form of non compliance that can attract penalties and fines.
What is the penalty for non submission of audited financial statements?
The penalties levied can vary from bank to bank and the nature of loan. It may vary from 0.25% to 2% of the loan amount. In certain specific cases, an absolute penalty of Rs. 25k / 50K may also be levied.
Can delayed submission of audited financials affect future borrowing or credit rating?
Yes, a repeated failure to comply with the deadlines can negatively affect a company’s creditworthiness and internal bank rating. This will impact future credit terms and the borrowers negotiating power.