General Studies · Internal Control and Audits
During a Surprise Inspection by a bank's internal inspection team, it was found that the physical keys to the strong room and the combination lock codes were both held by the same officer. This is a direct violation of which fundamental principle of banking operations, and what is the required rectification?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It violates the principle of Materiality; the bank must replace all physical access parameters with biometric sensors immediately.
- 2It violates the principle of Joint Custody and Dual Control; the keys and combination codes must be split between two different authorized officials at all times.✓
- 3It violates the principle of Consistency; the officer must record the codes in a secret physical register kept under the Branch Manager's custody.
- 4It is acceptable operational practice provided the officer has a verified clean record of service exceeding 10 years.
Correct answer
It violates the principle of Joint Custody and Dual Control; the keys and combination codes must be split between two different authorized officials at all times.
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