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CS Professional · Banking and Insurance - Laws and Practice · Analysis of Financial Statements of Banks

Sahyadri Bank, a scheduled commercial bank, is preparing its annual financial statements. The finance head asks which statutory format governs the presentation of the balance sheet of a banking company in India. Which is correct?

A banking company in India prepares its balance sheet and profit and loss account in the forms given in the Third Schedule to the Banking Regulation Act, 1949, not in Schedule III of the Companies Act, which applies to non-banking companies.

  1. ASchedule III to the Companies Act, 2013
  2. BThird Schedule to the Banking Regulation Act, 1949Correct
  3. CSchedule II to the Reserve Bank of India Act, 1934
  4. DFormat prescribed by the Securities Contracts (Regulation) Act, 1956

Explanation

Section 29 of the Banking Regulation Act, 1949 requires banking companies to prepare the balance sheet and profit and loss account in the forms set out in the Third Schedule. Schedule III of the Companies Act applies to ordinary companies, not banks, so option A is wrong.

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