Skip to content

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

Sahyadri Bank Ltd., a commercial bank in India, is preparing its annual financial statements. The Chief Financial Officer asks under which statute and form the balance sheet and profit and loss account must be presented. Which is correct?

A banking company prepares its balance sheet in Form A and its profit and loss account in Form B of the Third Schedule to the Banking Regulation Act, 1949. Schedule III of the Companies Act, 2013 does not apply to banks, which follow this special banking format.

  1. ASchedule III of the Companies Act, 2013, as is the case for all companies
  2. BThird Schedule to the Banking Regulation Act, 1949, in Forms A and BCorrect
  3. CReserve Bank of India Act, 1934, in the format prescribed by SEBI
  4. DNegotiable Instruments Act, 1881, in the format approved by the auditor

Explanation

Banking companies in India present their balance sheet in Form A and profit and loss account in Form B of the Third Schedule to the Banking Regulation Act, 1949. Schedule III of the Companies Act applies to ordinary companies, not banks, so the first option is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Analysis of Financial Statements of Banks shows your real accuracy, how long you take and where you lose marks.

Practise Analysis of Financial Statements of BanksFree diagnostic mock

More Analysis of Financial Statements of Banks questions