1626019721
1626019721
1626019721
♦Introduction
A banking company means and includes any company which carries on the business or
which transacts business of banking in India. A banking company is generally
governed by the provisions of the Companies Act, 2013 and specifically by the
Banking Regulation Act. The Banking Regulation Act of 1949 came into force on
16th March, 1949 as a result of the long –felt need to regulate the banking business in
India and protect the interests of number of depositors.
♦Functions of a Bank
Banking has been defined by Section 5 of the Banking Regulation Act and means:
accepting of deposits of money from the public, for purpose of lending or investment
and the deposit are repayable on demand or otherwise by cheque, draft, order etc.
Submission of Accounts (Section 31 and 32): Three copies of the balance sheet and profit and
loss account prepared under Section 29 together with auditor’s report under section 30 must be
submitted to the RBI within 3 months from the end of the period to which they refer.
However, it can be extended up to a further period of 3 months by RBI (Section 31).
Section 32 of the Act requires a banking company (but not other types of banks)to furnish 3
copies of its annual accounts and auditor’s report there on the Registrar of Companies at the
same time when it furnished these documents to the RBI.
Publication of Accounts: Rule 15 of the Banking Regulating (Companies) Rules, 1949.
Publication of accounts- within 6 months
♦Balance sheet-Form A
Schedule 1: Capital
Schedule 2: Reserves & surplus
Schedule 3: Deposits
Schedule 4: Borrowings
Schedule 5: Other Liabilities & Provisions
Schedule 6: Cash & Bank Bal. RBI
Schedule 7: Balances with Banks & Money at call and Short Notice
Schedule 8: Investments
Schedule 9: Advances
Schedule 10: Fixed Assets
Schedule 11: Other Assets
Schedule 12: Contingent Liabilities
(i) Claims against bank not acknowledged as debts
(ii) Liability for partly paid shares
(iii) Liability on account of outstanding forward exchange contracts
(iv) Acceptances ,endorsement & other obligations
(v) Other items for which bank is contingently liable.
♦Profit & loss account-form B
Income
Schedule.13
Interest Earned
Schedule.14
Other Income
Expenditure
Interest Expended Schedule.15
Operating Expenses Schedule.16
Provision for contingencies
Profit /Loss
Appropriations
Transfer to Reserves
Proposed dividend
Balance carried to Balance sheet
Other Income
Important points
securities shown at book value and diff. between MV and BV is given in the notes
If some fixed assets are w/o on revaluation of assets/reduction of capital every B/S after
wards should. show the revised figure for next 5 yrs. With the date & amt. revised
Other fixed assets includes vehicles, furniture and fixtures. Lockers and safe deposit
vaults are included in furniture
20% to reserve fund before declaring dividend
Gold is treated as investment
Silver is treated as other assets
Income from performing assets is recognized on accrual basis while in r/o non-
performing assets it is on cash basis
In r/o NPA, if income is already recognized, then make provision
Performing and
non performing ( remain out of order)
Income Recognition
Performing-accrual basis
Non performing-cash basis
Asset Classification
-Marked to market
-no marked to market. Marked to market
-profit on sale of
Profit on sale treated as To be sold within 90
investment. taken to P&L
cap. Reserve days
a/c
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