JAIIB · AFM · Chapter 6

Final Accounts of Banking Companies

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.

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Q

What is the definition of 'Banking' under Section 5 of the Banking Regulation Act, 1949?

A

Accepting deposits from public for lending/investment, repayable on demand or otherwise, withdrawable by cheque/draft/order.

Q

Name three categories of banks constituted in India.

A

Body corporate under special Act (SBI, RRBs), company under Companies Act 1956/2013, co-operative society.

Q

Which schedule of the Banking Regulation Act prescribes balance sheet and P&L formats for banking companies?

A

Third Schedule: Form A (Balance Sheet) and Form B (Profit & Loss Account).

Q

How many directors must sign financial statements of an Indian-incorporated banking company?

A

At least three directors (or all if total number is three or less), plus manager/principal officer.

Q

What is the timeline for submitting accounts to RBI under Section 31?

A

Three copies within three months from end of accounting period; RBI may extend by another three months (max six months).

Q

When must foreign banks display their audited balance sheet and P&L in India?

A

Not later than first Monday in August of any year they carry on business in India.

Q

What accounting system do banks follow?

A

Mercantile (accrual) system of accounting.

Q

Define 'Bankers' Books' under Section 2(3) of the Bankers' Books Evidence Act.

A

Ledgers, day book, cash books, account books and all books used in ordinary business of bank.

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