Every banking company has to prepare balance-sheet and profit and loss account as per provisions of Section 29 of Banking Regulation Act, 1949. While preparing such account, every banking company incorporated in India should cover all business transacted by it and every banking company incorporated outside India i.e. foreign banks should cover all business transacted through their branches in India only. The annual accounts & balance sheet of banking company should be prepared at the expiration of each calendar year or at the expiration of a period of twelve month ending with such date as the Central Government may specify by notification in the Official Gazette.
The balance-sheet and Profit & Loss account of a banking company should be prepared in a form set out in the third schedule of BR Act. The companies Act specifies the format set out in Part I -of Schedule VI to the Companies Act, 1956 that every company have to follow for preparing the balance-sheet and Profit & Loss. In the areas where there are inconsistencies in balance-sheet and Profit & Loss account with respect to provision of companies Act, the provisions of BR Act shall have the overriding effect. However, where provisions of companies Act and BR act are consistent with each, those consistent provisions shall be applicable.
The balance-sheet and profit and loss account of a banking company incorporated in India has to be signed by the manager or the principal officer of the company and by:
The balance-sheet and profit and loss account of a banking company incorporated outside India can be signed by the manager or agent of the principal office of the company in India
The banking companies have to furnish three copies of balance-sheet and Profit & Loss account as returns to the Reserve Bank within three months from the end of the period to which they refer. The Reserve Bank can extend the period for submission by a further period not exceeding three months.
Section 220(1) of the Companies Act, 1956 requires a company to submit three copies of balance sheet and the profit and loss account along with auditor’s report to Registrar of Companies. However section 32(1) of BR Act requires the banking companies to send three copies of balance sheet, the profit and loss account and auditor’s report to registrar as submitted to RBI as per provisions of Section 31 of BR Act. The copies so sent to registrar must be dealt with in all respects as if they were filed in accordance with Section 220(1) of the Companies Act, 1956
When a banking company submits any additional statement or information in relation to balance sheet and the profit and loss account to RBI, a copy of such additional statement or information must be sent to registrar.
Every Foreign bank (banks incorporated outside India) should display its last audited balance-sheet and profit and loss account in a conspicuous place in its principal office and in every branch located in India not later than the first Monday in August of any year in which it carries on business. Such balance sheets and profit and loss account shall be kept display until replaced by a copy of the subsequent balance-sheet and profit and loss account. Every foreign bank banking company shall display in like manner copies of its complete audited balance-sheet and profit and loss account relating to its banking business as soon as they are available, and shall keep the copies so displayed until copies of such subsequent accounts are available
Read Next: Audit and Auditors
Download this article as PDF
Click to go to JAIIB Preparation Page
Tags: annual accounts & balance sheet of banking company
October – 2020 Edition
September – 2020 Edition
August – 2020 Edition
July – 2020 Edition
June – 2020 Edition
May – 2020 Edition
April – 2020 Edition
March – 2020 Edition
February – 2020 Edition
January – 2020 Edition
December – 2019 Edition
Punjab Civil Services 2020