1. Rayat Shikshan Sanstha’s S. M
Rayat Shikshan Sanstha’s S.M.JOSHI COLLEGE, HADAPSAR, PUNE Department of Commerce Prof. Gulave R.G.

2. FINAL ACCOUNTS OF BANKING COMPANIES

3. DEFINITION
Section 5 of banking regulation act defines banking as “the accepting, for the purpose of lending or investment, of deposit of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.

4. Features of banking company
The borrowing,raising,or taking up of money.
The lending or advancing of money either upon or without security.
The granting and issuing of letters of credit, travellers cheques and circular notes.
The buying and selling of bullion.
The buying and selling of foreign exchange including foreign bank notes.
Contracting for public and private loans negotiating and issuing the same.
Undertaking and executing trust.

5. Continued
The acquisition, constructing, maintenance and alternation of any building or works necessary or convenient for the purpose of the company.
Carrying on and transacting every kind of guarantee and indemnity business.
The collecting and transmitting of money and securities.
Undertaking the administration of estates as executor, trustee or otherwise

6. General Information
No banking company can carry on business in India unless its subscribed capital is not less than one- half of the authorized capital and its paid up capital is not less than one – half of subs.capital.
A banking company cannot create any charge upon its uncalled capital.
Every banking co.shall transfer a sum equal to 25% of profits to statutory reserve.
A bank can open a branch only at the permission or reserve bank

7. Accounting System
The accounting system of a banking company is different from that of a trading or manufacturing company. A bank has a large number of customers whose acc are to be maintained in such a way so that these should be kept upto date.

8. Features Of Banking Acc System
Entries in the personal ledgers are made directly from vouchers.
From such entries in personal acc each day summary sheets in total are prepared.
The general ledger’s trial balance is extracted and agreed every day.
A trial balance of detailed personal ledger is prepared periodically and get agreed with general ledger.
Two vouchers are prepared for every transaction not involving cash- debit and credit voucher.

9. Books Required Receiving cashier’s counter cash book.
Paying cashier’s counter cash book.
Current accounts ledger.
Loan ledger.
Cash credit ledger.
Investment ledger.
Saving bank accounts ledger.
Recurring deposits accounts ledger.
Bill discounted and purchased ledger.

10. Principal Books Of Accounts Are:
Cash book: This book gives the summary of the receiving cashier’s counter cash book and paying cashier’s cash book.
General ledger: This ledger contains control acc for subsidiary ledger listed above and acc of expenses and assets not covered by the subsidiary ledger.

11. Notes And Instruction For Compilation
The formats of balance sheet and profit n loss acc cover all items likely to appear in these statement.
The words ‘current year’ and ‘previous year’ used in the formats are only to indicate the order of presentation and may not appear in acc.
Figures should be rounded off to nearest thousand.

12. BANKS PREPARE THEIR ACCOUNTS ACCORDING TO BANKING REGULATION ACT, 1949
BANKS PREPARE THEIR ACCOUNTS ACCORDING TO BANKING REGULATION ACT, THE FINAL ACCOUNTSOF BANK ARE IN VERTICAL FORMAT . THE FINAL ACCOUNTS CONSIST OF :-
PROFIT and LOSS ACCOUNT
PROFIT and LOSS APPROPRIATION ACCOUNT
BALANCE SHEET
THERE ARE 16 SCHEDULES IN THE FINAL ACCOUNTS OF BANKS.

13. Cash in hand and with RBI 6. Bal. with other banks and money at
BALANCE SHEET OF XYZ BANK AS ON 31ST MARCH 2008
PARTICULARS SCHEDULE AMT.
NO.
Capital
Reserves and surplus
Deposits
Borrowings
Other liabilities
TOTAL
Cash in hand and with RBI
Bal. with other banks and money at
Call and short notice
Investments
Advances
Fixed assets
Other assets
CONTINGENT LIABILITIES

14. Provision and contingencies - TOTAL (B) PROFIT (A-B)
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31ST MARCH, 2008.
PARTICULARS SCHEDULE
NO AMOUNT
INCOMES:-
Interest earned
Other incomes
TOTAL(A)
EXPENDITURE:-
Interest expanded
Operating expenses
Provision and contingencies
TOTAL (B)
PROFIT (A-B)

15. Net profit during the year Profit of the last year
PROFIT AND LOSS APPROPRIATION ACCOUNT
PARTICULARS AMOUNT
Net profit during the year
Profit of the last year
TOTAL PROFIT AVAILABLE FOR
APPROPRIATION
Statutory reserve
General reserves or other reserves
Dividends
SURPLUS TO BALANCE SHEET

16. WORKING NOTES :- CAPITAL ( SCHEDULE NO. 1 ) PARTICULARS Amt.
Equity share capital
Preference share capital
Less:- calls in arrears
Add:- calls in advance
Add:- share forfeiture

17. RESERVES AND SURPLUS ( SCHEDULE NO. 2 )
PARTICULARS AMOUNT
Statutory Reserve
General reserve
Capital reserve
Investment Fluctuation Reserve
Workmen compensation fund
Sinking fund
Surplus ( P/L app. a/c)
Building fund
Depreciation fund
Tax fund
Capital redemption reserve

18. DEPOSITS ( SCHEDULE NO. 3 )
PARTICULARS AMOUNT
Fixed deposits
Saving deposits
Current account
Recurring deposit
L/C a/c
Other deposits except income tax deposit
BORROWING ( SCHEDULE NO. 4 )
PARTICULARS AMOUNT
Borrowing from RBI
Borrowing from other banks
Borrowing in India or outside in India

19. OTHER LIABILITIES (SCHEDULE NO. 5 )
PARTICULARS AMOUNT
Bills payable
Outstanding expenses
Unpaid dividend
Incomes received in advance
Interoffice adjustment
Reserve for unexpired discount
CASH IN HAND AND WITH RBI (SCHEDULE NO. 6 )
PARTICULARS AMOUNT
Cash in hand with bank
Balance with RBI

20. BALANCE WITH OTHER BANKS AND MONEY AT CALL AND SHORT NOTICE ( SCHEDULE NO. 7 )
PARTICULARS AMOUNT
Balance with other banks
Money at call and short notice
(short term loan given by bank to its
Esteem customers)

21. INVESTMENTS ( SCHEDULE NO. 8 )
PARTICULARS AMOUNT
Government securities
Bonds
Mutual funds
Equity shares of other companies
Gold etc.
ADVANCES ( SCHEDULE NO. 9 )
PARTICULARS AMOUNT
Term loan
Bank overdraft
Cash credit and bill discount

22. Plant and machinery motor vehicles Computers etc.
FIXED ASSETS ( SCHEDULE NO. 10 )
PARTICULARS AMOUNT
Premises
Furniture
Fixtures
Equipments
Land and building
Plant and machinery motor vehicles
Computers etc.