JAIIB AFb Unit 16 - Final Accounts of Banking Companies

Requirements –Accounts & audit

1. Third Schedule annexed to BRA
2. Form A- Balance sheet
3. Form B- Profit & Loss Account
4. Audit
5. Submission of accounts- RBI- within 3 months
6. Publication of accounts- within 6 months
7. Auditor-prior approval of RBI for appt/removal

Balance sheet-Form A

Capital & Liabilities	Assets
1.Capital	6.Cash & Bank Bal. RBI
2. Reserves & surplus	7.Balances with Banks & Money at call and SN
3.Deposits	8.Investments
4.Borrowings	9Advances
5 Other Liabilities & Provisions	10.Fixed Assets
	11.Other Assets

Demand deposits

1. Credit balances in OD and CC
2. Deposits payable at call
3. Overdue deposits
4. In-operative current accounts
5. Matured time deposits
6. Matured cash certificates
7. Matured certificate of deposits

Contingent liabilities
Schedule-12

1. Claims against bank not acknowledged as debts
2. Liability for partly paid shares
3. Liability on account of outstanding forward exchange contracts
4. Acceptances ,endorsement & other obligations
5. Other items for which bank is contingently liable.

PROFIT & LOSS ACCOUNT-FORM B

Income Interest Earned Other Income	Schedule.13 Schedule.14
Expenditure Interest Expended Operating Expenses Provision for contingencies	Schedule.15 Schedule.16
Profit /Loss
Appropriations Transfer to Reserves Proposed dividend Balance carried to Balance sheet
Significant Accounting Policies	Schedule.17
Notes forming part of Accounts	Schedule.18

Other Income

1. Profit on exchange transactions
2. Profit on sale of investments
3. Profit on revaluation of investments
4. Profit on sale of fixed assets
5. Letting of locker (income from locker charges )
6. Misc. income -Godown rent

Just go through these points

1. Govt. securities shown at book value and diff. between MV and BV is given in the notes
2. 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
3. Other fixed assets includes vehicles, furniture and fixtures. Lockers and safe deposit vaults are included in furniture
4. 20% to reserve fund before declaring dividend
5. Gold is treated as investment
6. Silver is treated as other assets
7. Income from performing assets is recognized on accrual basis while in r/o non-performing assets it is on cash basis
8. In r/o NPA, if income is already recognized, then make provision

ASSET CLASSIFICATION ETC

1. Asset Classification
1. Performing and
2. non performing ( remain out of order)
2. Income Recognition
1. Performing-accrual basis
2. Non performing-cash basis
3. Asset Classification
1. Std-0.40% (revised from 0.25%)
2. Sub-Std.-Unsecured – 25%, Secured - 15%
3. Doubtful – Unsecured - 100%, Secured - upto 1year-25%, 1 to 3yrs-40%, more than 3 years - 100%
4. Loss assets-100%

SLR & NON SLR DEPOSITS

Held to maturity	Available for sale	Held for trading
Investment should not exceed 25% of total investment	Freedom available	Freedom available
-no marked to market. Profit on sale treated as cap. Reserve	-Marked to market -profit on sale of investment.taken to P&L a/c	Marked to market  To be sold within 90 days