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Pradeepta Sethi
TAPMI
Financial statements of bank
Preparation and finalization of financial statements of a bank are
governed by Banking Regulation Act 1949.
RBI devised a format for preparing balance sheet and each bank
has to follow the same format.
Section 29 - Every bank has to publish the balance sheet as on
last working day of March every year on the prescribed Form A &
profit and loss account on Form B on 3rd schedule of this Act.
Section 30 - Balance sheet is to be audited from qualified auditors.
Section 31 - Each bank is required to submit balance sheet and
auditors report within three months from the end of period.
The RBI has powers to modify and suggest certain changes in the
financial reporting format from time to time.
Item Schedule Coverage
Interest 13 I. Interest /discount on advances/bills.
earned II. Income on investments
III Interest on balances with Reserve Bank of India and other interbank funds
Other 14 I. Commission, Exchange & brokerage
Income II Net Profit on sale of Investments (net profit on sale-net loss on sale)
III. Net Profit on revaluation of investments
IV. Net Profit on sale of land, building & other assets
V. Profit (net of loss) on exchange transactions
VI. Income earned by way of dividends, etc. from subsidiaries/companies
and/or joint ventures abroad/in India
VII. Miscellaneous Income
Interest 15 I. Interest on deposits
Expended II. Interest on RBI/ Inter-Bank borrowings & III. Others
Operating 16 I. Payments to and provisions for employees II. Rent, Taxes & Lighting
Expenses III. Printing & Stationery IV. Advertisement and Publicity
V. Depreciation on Banks property, VI. Directors fees, allowances and
expenses VII. Auditors fees & expenses (including branch auditors)
VIII. Law charges IX. Legal and other expenses debited in respect of PB
Accounts, X. Postage, Telegram, Telephones, etc. XI. Repairs and
Maintenance XII. Insurance XIII. Other Expenditure
Provisions Provisions & Contingencies made for i) Income Tax ii) Other Taxes
& Contin- iii) NPAs iv) Investments v) Others
-gencies I. Transfer to Statutory Reserves II. Transfer to Capital
Bank earnings
Principal source of banks earning
Net Interest Income (NII) = Interest income Interest expense
Capital
For PSUs
Capital owned by Central Government (major portion).
Other Indian banks
Authorized, Issued, Subscribed and Called up capital should
be given separately.
Banking Companies incorporated outside India
The amount of deposit kept with Reserve Bank of India,
under sub-section 2 of section 11 of the Banking Regulation
Act 1949.
Balance sheet
Capital Reserve
That portion of a bank's profits not paid out as dividends to
shareholders.
Surplus on revaluation or sale of fixed assets should be treated as
capital reserves.
Premium on issue of share capital may be shown separately under
this head.
Revenue Reserve
Any reserve other than capital reserve, other than those separately
classified
Funds Transfer Pricing (FTP)
Funds surplus branches - mobilize more deposits but extend
lesser amount of loan Provider of funds