Accounts of Banking Companies

Core concepts

1. 01Governed by Banking Regulation Act 1949 & RBI guidelines.
2. 02Form A (Balance Sheet) and Form B (P&L) under Third Schedule.
3. 03NPAs: Standard, Sub-standard (≤12 months), Doubtful, Loss assets.
4. 04Provisioning percentages vary by asset classification (RBI norms).
5. 05Statutory reserve: ≥25% of net profit before any dividend (Sec 17).

Exam-critical pointers

• ⭐Slip system of ledger posting unique to banks (vouchers slips classified daily).
• ⭐Statutory reserve transfer: minimum 25% of profit (no exemption unless RBI approves).
• ⭐Interest on doubtful debts not recognised — only on cash receipt.
• ⭐Disclose movement of NPAs & restructured accounts in notes.