{"id":2609,"date":"2019-10-20T12:32:27","date_gmt":"2019-10-20T12:32:27","guid":{"rendered":"https:\/\/commerceiets.com\/?p=2609"},"modified":"2019-10-20T12:32:27","modified_gmt":"2019-10-20T12:32:27","slug":"provisions-of-banking-regulation-act-1949","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/","title":{"rendered":"PROVISIONS OF BANKING REGULATION ACT 1949"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#PROVISIONS_OF_BANKING_REGULATION_ACT_1949\" title=\"PROVISIONS OF BANKING REGULATION ACT 1949\">PROVISIONS OF BANKING REGULATION ACT 1949<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#PROVISIONS_OF_BANKING_REGULATION_ACT_1949-2\" title=\"PROVISIONS OF BANKING REGULATION ACT 1949\">PROVISIONS OF BANKING REGULATION ACT 1949<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#FLOATING_CHARGE\" title=\"FLOATING CHARGE\">FLOATING CHARGE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#RESTRICTIONS_ON_DIVIDENDS\" title=\"RESTRICTIONS ON DIVIDENDS\">RESTRICTIONS ON DIVIDENDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#STATUTORY_RESERVE\" title=\"STATUTORY RESERVE\">STATUTORY RESERVE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#CASH_RESERVE\" title=\"CASH RESERVE\">CASH RESERVE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#STATUTORY_LIQUIDITY_RESERVE\" title=\"STATUTORY LIQUIDITY RESERVE\">STATUTORY LIQUIDITY RESERVE<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#PERFORMA_OF_PROFIT_AND_LOSS_ACCOUNT\" title=\"PERFORMA OF PROFIT AND LOSS ACCOUNT\">PERFORMA OF PROFIT AND LOSS ACCOUNT<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#GUIDELINES_OF_RBI_REGARDING_PROFIT_AND_LOSS_ACCOUNT\" title=\"GUIDELINES OF RBI REGARDING PROFIT AND LOSS ACCOUNT\">GUIDELINES OF RBI REGARDING PROFIT AND LOSS ACCOUNT<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#PERFORMA_OF_BALANCE_SHEET\" title=\"PERFORMA OF BALANCE SHEET\">PERFORMA OF BALANCE SHEET<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/#GUIDELINES_BY_RBI_REGARDING_BALANCE_SHEET\" title=\"GUIDELINES BY RBI REGARDING BALANCE SHEET\">GUIDELINES BY RBI REGARDING BALANCE SHEET<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"PROVISIONS_OF_BANKING_REGULATION_ACT_1949\"><\/span>PROVISIONS OF BANKING REGULATION ACT 1949<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">The provisions of banking regulation act 1949 relating to accounts of banking companies are as follows:<\/p>\n\n\n\n<p>BANKING COMPANY<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Banking company is a company that deals in cash, money and\ncredit. It accepts deposits and extends loans and advances to the needy\npersons.<\/p>\n\n\n\n<p class=\"has-background has-medium-font-size has-pale-cyan-blue-background-color\"><strong>ACCORDING TO BANKING REGULATION ACT, 1949<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">\u201cBanking refers to the acceptance for the purpose of lending\nor investment of deposits of money from the public repayable of demand, order\nor otherwise and withdrawal by cheque, draft, order or otherwise.\u201d<\/p>\n\n\n\n<p class=\"has-medium-font-size\">According to Section 6 of Banking Company Regulation Act,\n1949, a banking company may deal in following forms of business:<\/p>\n\n\n\n<ul><li>Borrowing and lending of money <\/li><li>Drawing, making, accepting, endorsing, buying and selling of bills of exchange, hundies, promissory notes, debentures and other alike securities.<\/li><li>Contracting for public and private loans<\/li><li>Acting as an agent for government or local authority<\/li><li>Undertaking and executing of trusts<\/li><li>Acquisition, construction, maintenance and alteration of any building or works<\/li><li>Carrying on and transacting every kind of guarantee and indemnity business.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"PROVISIONS_OF_BANKING_REGULATION_ACT_1949-2\"><\/span>PROVISIONS OF BANKING REGULATION ACT 1949<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">The Provisions of Banking Regulation Act 1949 are as follows:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FLOATING_CHARGE\"><\/span>FLOATING CHARGE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Section 14 A states that the banking company cannot create a\nfloating charge on any company. It can be created only by getting the\ncertificate from Reserve Bank of India otherwise the floating charge will be\ninvalid.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RESTRICTIONS_ON_DIVIDENDS\"><\/span>RESTRICTIONS ON DIVIDENDS<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Under Section 15, a banking company cannot pay dividends\nunless all of its capitalized expenses has been completely written off.\nCapitalised expenses are:<\/p>\n\n\n\n<ul><li>Preliminary expenses<\/li><li>Organization expenses<\/li><li>Share ceiling commission<\/li><li>Brokerage<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">But a banking company need not write off<\/p>\n\n\n\n<ul><li>Depreciation in the value of its investments<\/li><li>Devaluation of the shares or debentures<\/li><li>Bad debts. <\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"STATUTORY_RESERVE\"><\/span>STATUTORY RESERVE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Section 17 of the Banking Companies Act, 1949 states that it\nis a legal obligation for the banking companies to create statutory reserve.\nThe 25% of the profits earned by the bank is transferred to the statutory\nreserve. It is created before making any appropriation. It is show separately\nunder the head \u2018Reserves and Surplus\u2019 in schedule 2.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CASH_RESERVE\"><\/span>CASH RESERVE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">All scheduled banks have to maintain the reserve of 5% of\nthe deposits with the Reserve Bank of India. This percentage can be raised upto\n15% by Reserve Bank of India. All non-scheduled banks are also required to make\nthis reserve upto 3% of the total deposits with Reserve Bank of India.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"STATUTORY_LIQUIDITY_RESERVE\"><\/span>STATUTORY LIQUIDITY RESERVE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Under Section 24(2), every banking company has to maintain a\nreserve in the form of cash, gold or any approved securities. This reserve is\ncreated at 25%-40%. The statutory liquidity ratio is decided by the Reserve\nBank of India and&nbsp; published in the\nofficial gazette.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"PERFORMA_OF_PROFIT_AND_LOSS_ACCOUNT\"><\/span>PERFORMA OF PROFIT AND LOSS ACCOUNT<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">The profit and loss account is prepared as prescribed under\nthe FORM B <\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><td>\n  Schedule No.\n  <\/td><td>\n  Year ended 31.3\u2026..(Current Year)\n  <\/td><td>\n  Year ended 31.3\u2026.. (previous year)\n  <\/td><\/tr><tr><td>\n  I\n  <\/td><td>   <strong>INCOME<\/strong>   <br \/>Interest earned   <br \/>Other Income <br \/>  \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   Total   <\/td><td>   \u00a0  13   <br \/>14   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  II\n  <\/td><td>   <strong>EXPENDITURE<\/strong>   <br \/>Interest expended   <br \/>Operating Expenses   <br \/>Provisions and Contingencies   \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  <br \/>                                           Total   <\/td><td>   \u00a0  15   <br \/>16   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  III\n  <\/td><td>   <strong>PROFIT\/ LOSS<\/strong>   <br \/>Net Profit\/ Loss (-) for the year   <br \/>Profit\/ Loss (-) brought forward   \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   Total   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  IV\n  <\/td><td>   <strong>APPROPRIATIONS<\/strong>   <br \/>Transfer to statutory reserves   <br \/>Transfer to other reserves   <br \/>Transfer to government\/ proposed dividend   <br \/>Balance carried over to balance sheet\u00a0\u00a0\u00a0\u00a0    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   Total   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GUIDELINES_OF_RBI_REGARDING_PROFIT_AND_LOSS_ACCOUNT\"><\/span>GUIDELINES OF RBI REGARDING PROFIT AND LOSS ACCOUNT<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><strong>INTEREST EARNED:<\/strong> Interest earned covers the elements like:<\/p>\n\n\n\n<ul><li>Interest\/ discount on advances\/ bills.<\/li><li>Income on investments<\/li><li>Interest on balances with Reserve Bank of India\nand other Inter Bank Funds<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The interest or discount on loans like credit, demand loans,\noverdraft, export loans, term loans and income derived from investments\nportfolio are compiled as income under interest earned.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>OTHER INCOMES:<\/strong> Other incomes includes:<\/p>\n\n\n\n<ul><li>Commission on collections, transfers, letters of\ncredit etc. and brokerage on securities.<\/li><li>Profit on sale of investments less loss on sale\nof investments.<\/li><li>Profit on revaluation of assets less loss.<\/li><li>Profit on sale of fixed assets less loss.<\/li><li>Income earned b way of dividends and profits on\nexchange transactions less loss.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>INTEREST EXPENDED:<\/strong> It includes the following expenses:<\/p>\n\n\n\n<ul><li>Interest paid on all types of deposits from\nbanks and other institutions.<\/li><li>Interest paid on all borrowings from RBI.<\/li><li>The payments like penal interest paid etc.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>OPERATING EXPENSES: <\/strong>Operating expenses are the expenses related to the operating activities of the business. It includes the payment regarding:<\/p>\n\n\n\n<ul><li>Salaries, wages, allowances, bonus, pension,\ngratuity, staff welfare allowance etc.<\/li><li>Rent paid by the banks, municipal taxes,\nelectricity charges etc.<\/li><li>Stationery, advertisement expenses, depreciation\non bank\u2019s property.<\/li><li>Fees of directors, audit fees, legal charges.<\/li><li>Postage, telegrams, telephones, insurance,\ndonations, license fees etc.<\/li><li>The provisions regarding tax, doubtful debts,\ndiscount on debtors etc.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"PERFORMA_OF_BALANCE_SHEET\"><\/span>PERFORMA OF BALANCE SHEET<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">The Balance Sheet is prepared as prescribed by FORM A of\nthird schedule of the Banking Regulation&nbsp;\nAct, 1949 :<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><td>\n  <strong>Schedule No.<\/strong>\n  <\/td><td>\n  <strong>As on 31.3\u2026. (Current Year)<\/strong>\n  <\/td><td>\n  <strong>As on 31.3\u2026. (Previous Year)<\/strong>\n  <\/td><\/tr><tr><td>\n  &nbsp;\n  <\/td><td>   <strong>CAPITAL AND LIABILITIES<\/strong>   <br \/>Capital   <br \/>Reserves and Surplus   <br \/>Deposits   <br \/>Borrowings   <br \/>Other Liabilities and provisions   \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   Total   <\/td><td>   1<br \/>   2<br \/>   3<br \/>   4<br \/>   5   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  &nbsp;\n  <\/td><td>   <strong>ASSETS<\/strong>   <br \/>Cash and bank balance with RBI   <br \/>Balances with banks and money at call and short notice   <br \/>Investments   <br \/>Advances   <br \/>Fixed Assets   <br \/>Other Assets    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   Total   <\/td><td>   6<br \/>   7<br \/>   8<br \/>   9<br \/>   10<br \/>   11   <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  &nbsp;\n  <\/td><td>   Contingent Liabilities   <br \/>Bills for Collections   <\/td><td>\n  12\n  <\/td><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GUIDELINES_BY_RBI_REGARDING_BALANCE_SHEET\"><\/span>GUIDELINES BY RBI REGARDING BALANCE SHEET<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><strong>CAPITAL:<\/strong> Capital is the amount invested in the Banking company and covers:<\/p>\n\n\n\n<ul><li>Capital owned by Central Government<\/li><li>Amount brought in by the banks by way of startup\ncapital.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>RESERVES AND SURPLUS:<\/strong> Reserves and surplus are the amount set aside out of the profits. The reserves created are:<\/p>\n\n\n\n<ul><li>Statutory reserves (25% of the profits)<\/li><li>Capital reserves which should not include the\namount available for distribution through Profit and Loss Account.<\/li><li>Securities Premium is premium on issue of share\ncapital.<\/li><li>Balance of profits after appropriation.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>DEPOSITS: <\/strong>Deposits are the amount deposited in the banking company by the public and it covers:<\/p>\n\n\n\n<ul><li>All demand deposits from banks and non-banking\nsectors repayable on demand. <\/li><li>The saving bank deposits, fixed deposits,\nannuity deposits, recurring deposits etc.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>BORROWINGS:<\/strong> Borrowings are the amount taken as loan and it covers:<\/p>\n\n\n\n<ul><li>Borrowings obtained from Reserve Bank of India\nand commercial banks.<\/li><li>Borrowings from IDBI, Export\/ Import Bank of\nIndia, NABARD etc.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>OTHER LIABILITIES AND PROVISIONS:<\/strong> It includes the following items:<\/p>\n\n\n\n<ul><li>Telegraphic transfers, travelers\u2019 cheques,\npay-in-slips, banker\u2019s cheques etc.<\/li><li>Interest accrued but not due on deposits and\nborrowings.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>CASH AND BALANCES WITH RBI: <\/strong>It covers the:<\/p>\n\n\n\n<ul><li>Cash in hand including foreign currency notes.<\/li><li>Balances with the RBI in current accounts and\nother accounts.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE:<\/strong> It includes or covers:<\/p>\n\n\n\n<ul><li>Balances with the banks in current and other\naccounts.<\/li><li>Money at call and short notice with banks and\nother financial institutions.<\/li><li>Includes balances held by the foreign branches\nand Indian branches.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>INVESTMENTS:<\/strong> All the amounts get invested in various securities are covered under this head. It covers<\/p>\n\n\n\n<ul><li>Amount invested in state as well as central\ngovernment securities.<\/li><li>Investment in shares and debentures of companies<\/li><li>Amount received in residual investments like\ngold, commercial papers etc.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>ADVANCES:<\/strong> It covers:<\/p>\n\n\n\n<ul><li>Bills purchased and discounted.<\/li><li>Cash credits and overdrafts<\/li><li>Term loans<\/li><li>Advances secured by tangible assets<\/li><li>Unsecured advances<\/li><li>Advances secured by government guarantee<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>FIXED ASSETS: <\/strong>Fixed assets included both tangible and intangible assets. It covers:<\/p>\n\n\n\n<ul><li>Assets purchased by the banking company.<\/li><li>All the additions made during the year in the\nassets.<\/li><li>The sale of asset is deducted from the\nrespective asset.<\/li><li>Land, building, motor vehicles etc.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>OTHER ASSETS:<\/strong> It includes and covers:<\/p>\n\n\n\n<ul><li>Interest accrued but not due on investments and\nadvances.<\/li><li>The amount of tax deducted at source on\nsecurities, advance tax paid etc.<\/li><li>The non-banking assets i.e. immovable\nproperties, tangible assets acquired in satisfaction of claims.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>CONTINGENT LIABILITIES:<\/strong> It contains:<\/p>\n\n\n\n<ul><li>The claims against the banks not acknowledged as\ndebts.<\/li><li>Liability for partly paid investments.<\/li><li>Guarantee given on behalf of constituents in\nIndia or in abroad.<\/li><li>Acceptances and endorsements i.e. letter of\ncredit and bills accepted on behalf of the customers.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>BILLS FOR COLLECTION: <\/strong>Bills are the other items in the course of collection and not adjusted will be shown against this item in the summary version only.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>PROVISIONS OF BANKING REGULATION ACT 1949 The provisions of banking regulation act 1949 relating to accounts of banking companies are as follows: BANKING COMPANY Banking company is a company that deals in cash, money and credit. It accepts deposits and extends loans and advances to the needy persons. ACCORDING TO BANKING REGULATION ACT, 1949 \u201cBanking&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/provisions-of-banking-regulation-act-1949\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;PROVISIONS OF BANKING REGULATION ACT 1949&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":2610,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[102],"tags":[178,179],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2609"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=2609"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/2610"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=2609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=2609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=2609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}