CV

CA Intermediate · Accounting

Accounts of Banking Companies

Chapter 5 · 3 formulas · 4 exam-critical pointers

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).

Flowchart

Asset Classification | Standard ---- 0.25% to 1% provision Sub-standard - 15% provision (secured) Doubtful --- 25%/40%/100% (D1/D2/D3) Loss --- 100% provision

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.

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