CORPORATE ACCOUNTING
H. Mohamed Abdul Raaziq
BC0150015
Banking companies account:
According to banking regulation act 1949, section 5, and banking defines as
“The accepting, for the purpose of lending or investment of deposits of money from the
public repayable on demand or otherwise and withdrawable by cheque, draft, and order
or otherwise.”
The provisions of the act, relating to annual accounts of banking company are as follows:
• Preparation of annual accounts.
At the end of accounting year, every banking corporate company in India, in respect of
all business transacted by it and every banking company incorporated outside India in
respect of all business transacted through the branches in India are required to prepare the
final accounts i.e. profit and loss a/c and balance sheet in forms set out in the third
schedule. Form A in third schedule is balance sheet form B is the profit & loss account.
Forms A and B have been revised w.e.f. 1at April 1991.
• Signing authority.
All the annual financial statements must be signed by manager or principal officer and by
at least 3 directors. In case banking company incorporated in India and there are not more
than 3 directors, all directors must sign the statement of accounts. In case banking co.
incorporated outside India, the manager of the principal office of the co. in India must
sign the statement of accounts.
• Auditing of accounts
Under sec 30, the banks are required to get their accounts audited from a duly qualified
chartered accountant, appointed with the prior permission of the Reserve Bank Of India.
Three copies of these audited statements with the report of the auditor have to be filed
with the Reserve Bank Of India and registrar of the companies of that area. It is also
necessary to get these audited statements published in the leading newspaper of India.
• Filing of accounts.
Every banking company must file the three copies of the audited balance sheet and profit
and loss a/c together with the auditors report shall be furnished as returns to the reserve
Bank of India within 3 months from the end of accounting year to which they relate. This
3 month period can be extended to further up to 3 months. RBI has authority to call for
further information as it may think fit. A banking company is also required to send to the
Registrar of companies three copies of its audited balance sheet and profit and loss a/c
and auditor’s report and if RBI demands any further information the copy of such
additional information is also required to submit to the registrar.
• Publication of accounts.
The balance sheet, profit and loss discount and the auditor’s report of every banking
company shall be published in any newspaper circulating at place where it has principal
office, within 6 months from the end of the accounting year. Every banking company
incorporated outside India has to display place of principal office, profit and loss
accounts and balance sheet in the publication.
• If rebate on bill discounted or unexpired discount at the end of the year given in trial
balance then it is to be shown on the liability side of the balance sheet under schedule 5.
• If rebate on bill discounted or unexpired discount at the end of the year given as
adjustment to the trial balance then it will be deducted out of the balance of discount
earned schedule 13 and also shown on the liability side of balance sheet under schedule
no. 5
• If market value of the investment given in the question then it will not to be treated
anywhere.
• Statutory reserve @ 5% current year profits should be made until accumulated balance of
statutory reserve and securities premium become equal to paid up capital.
• Figures should be rounded off to the nearest thousand rupees. Thus the sum of RS. 28,
72,821.75 will appear as RS. 2,872
