Books To Be Maintained By Banking Companies: Detailed Discussion. In order to maintain proper records of the various transactions undertaken by a banking company, various books have been prescribed under various laws which are to be maintained by the banks. Let us have a detailed look on the same.
Books To Be Maintained By Banking Companies
Every Banking companies for its proper functioning needs to maintain the following books:
Primary books are the books which helps the organizations in the preparation of financial statements. It consists of the following items
- Profit & Loss A/c.: It provides information regarding schedule 13 interest earned, schedule 14 other income, schedule 15 interest expended, and schedule 16 operating expenses.
- All Assets A/c.: Information relating to schedule 10 i.e. Asset at cost, additions during the year, Deduction during the year, depreciation till date.
- Other Personal Ledgers
- Revenue A/c.
These books are other than the principal books and include the following accounts:
- Current Account, Fixed Deposits, Loans, etc: It consists of Information relating to Schedule 3 i.e. Demand deposits from banks, from others, term deposits, Deposits in India, Deposits outside India, etc.
- Bills for Collection: Detailed Information is available party wise. It has to be mentioned in Form A of Balance Sheet.
Sub – Secondary Books:
These books reflect various transactions and consist of the following:
- LC (Letter of Credit): They are often used in international transactions to ensure that payment will be received where the buyer and seller may not know each other and are operating in different countries
- Guarantees Issued If any: Banks issue guarantee on behalf of several customers and are liable for payment in case of default by that customer. Bank receives consideration for providing guarantee
Inter Branch Journals
- It Consist of transfer entries passed by each department. It can rightly be called as Departmental Journal.
- It consist of all the adjustment entries passed by the banks
- Cash Receipt: It consist of Information regarding cash received .It helps to determine cash In hand as per Schedule 6 cash in hand
- Cash Payment: It consists of Information Regarding cash issued in accordance with schedule 6.
- Petty Cash Books: It consist information related to small expense by bank
- Other Important Cash Ledgers
It consist of-
- List of Cheques received for clearing from customers: It is a regular activity being carried out by bank on daily basis and appropriate controls are necessary.
- Cheques issued by banks: Banks may issue cheques for payment
Loans & Overdraft
- Securities held by bank: Every bank consists of various securities held by it on behalf of its customers, sometimes banks may also indulge in investments in various securities. Proper records of these books need to be maintained by banks.
- Storage Books, Delivery Order Books
- Drawing Power Books
- Overdraft Sanction Register:
- A/c Opening Details: It determines number of accounts opened in a bank within a certain period of time. Details of Customer opening account is stored here
- A/c Closing Details: Information regarding customers who have closed the account appears here. It helps to determine incoming and outgoing ratio and helps management to make vital decisions to retain customer
HR Departmental Books
- Salary Register: It consist of Information regarding salaries paid, salaries outstanding, advance salary, loans to employees, Incentive payable, bonus payable, excess amount recoverable from employees, etc.
- Attendance Register: It is to record attendance of employees
- Overtime Register: It determines overtime work done by employees and is helpful for giving overtime allowances.
- Fixed Assets: It contains full information about when the asset is purchased, asset sold, rate of depreciation, value of asset and the date when the asset is first put to use, charges against asset if any.
- Employee Turnover Ratio: It determines the number of employees who joined the organization during the year and employees who left the organization during the year.
- Stationery Registers: Details about all stationery items purchased appears here
- It consists of books for determining average balances in loans and advances, deposit received, matured etc.
It is very important to maintain all the above mentioned books by a banking company. Also, auditors are required to check the proper maintenance of these records.
- Basel III
- Digital empowerment
- Decision Support System
- Transaction Processing System
- Payment bank
- Nostro Account and Vostro Account
- Minor Bank Account
- Auto Sweep Bank Account
- Account Payee Cheque
- Fixed Deposit
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