Profit and loss account of banking companies

Profit and loss account of banking companies

• 1.
  PROFIT AND LOSSACCOUNT OF BANKING COMPANIES PRESENTED BY: ANAND SARAN 142005
• 2.
  PROFIT AND LOSSACCOUNT • A summery of the revenues, costs and expenses incurred during a specific period of time • Prepared to calculate the profit or loss of the Organisation during one financial year .
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  FUNCTIONS OF ABANK 1. Receiving deposits from the public 2. Granting loans and advances 3. A bank performs certain functions as an agent for and on behalf of its customers. 4. Other functions: • Issuing letters of credit to its customers • Issuing bank drafts • Issuing travelers cheques • Lockers
• 4.
  PROFIT AND LOSSACCONT OF BANKING COMPANIES • Banking Business in India is governed by the Banking Regulations Act 1949 • Section 29 of this Act lays down the provisions regarding Accounts and Balance Sheet of a banking company • The profit and loss account is shown in ‘Form B’ of Schedule III of this Act
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  SCHEDULES RELATED TOPROFIT AND LOSS ACCOUNT The schedules related to the calculation of income and expenses of a bank are as follows: • Schedule 13: Interest Earned • Schedule 14: Other Incomes • Schedule 15: Interest Expended • Schedule 16: Operating Expenses
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  FORM B: PROFITAND LOSS ACCOUNT I. Income Interest earned (Schedule 13) Other income (Schedule 14) Total II. Expenditure Interest expended (Schedule 15) Operating expenses (Schedule 16) Provisions and contingencies Total III. Profit / Loss Net profit / loss (-) for the year IV. Appropriations V. Balance carried over to Balance Sheet
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  SCHEDULE 13: INTERESTEARNED • Interest/discount on advance/bills • Income on investments • Interest on balances with Reserve Bank of India and other Inter bank funds • Others
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  SCHEDULE 14: OTHERINCOME • Commission, exchange and brokerage • Profit on sale of investments (Less: Loss on sale of investments) • Profit on revaluation of investments (Less: Loss on revaluation of investments) • Profit on sale of land, buildings and other assets (Less: Loss on sale of land, buildings and other assets) • Profit on exchange transactions (Less : Loss on exchange transactions) • Income earned by way of dividends, etc. from subsidiaries/ companies and/or joint ventures abroad/ in India • Miscellaneous income
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  SCHEDULE 15: INTERESTEXPENDED • Interest on deposits • Interest on Reserve Bank of India/Inter bank borrowings • Others
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  SCHEDULE 16: ORERATINGEXPENSES • Payment to and provisions of employees • Rent, taxes and lighting • Printing and stationery • Advertisement and publicity • Depreciation on bank's property • Director's fees, allowances and expenses `
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  Cont. • Auditor’s feesand expenses (including branch auditors) • Law charges • Postages, Telegrams, Telephones, etc. • Repairs and maintenance • Insurance • Other expenditure
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  APPROPRIATION OF PROFITS •Transfer to statutory reserves • Transfer to other reserves • Transfer to government/ Proposed dividend = Final Balance Transferred to the Balance Sheet (Transferred to the liabilities side under the head ‘Reserves and Surplus’)