Sections 29 to 34A of the Banking Regulation Act deal with accounts and audit. At the end of each financial year or at the expiration of a period of 12 months ending with such date as the Central Government may by notification in the Official Gazette specify in this behalf, every banking company incorporated in India in respect of business transacted by it shall prepare with reference to that year or period, a Balance Sheet and Profit and Loss Account as on the last working day of that year or the period in the forms set out in the Third Schedule or as near thereto as circumstances permit. Similarly, every banking company incorporated outside India is required to prepare Balance Sheet and Profit and Loss Account in respect of all business transacted through its branches in India. Form A of the Third Schedule deals with form of Balance Sheet and Form B of the Third Schedule deals with form of Profit and Loss Account. It is important to note that of late a set of new forms have been devised for balance sheet and profit and loss account of the banking companies and the Reserve Bank of India has issued guidelines to follow the new forms with effect from accounting year ending on 31st March, 1992. The new forms will be discussed at the appropriate place. The statement of accounts must be signed by the manager or principal officer and by at least three or all directors if there are not more than three directors in case of a banking company incorporated in India. In case of a banking company incorporated outside India, the statement of accounts must be signed by the manager or agent of the principal office of the company in India.
Under Section 30 of the Banking Regulation Act, the Balance Sheet and Profit and Loss Account prepared in accordance with Section 29 shall be audited by a person duly qualified under any law for the time being in force to be an auditor of companies. Every banking company is required to take previous approval of the Reserve Bank of India before appointing, re-appointing or removing any auditor or auditors. In addition, the Reserve Bank can order special audit of the banking companies accounts if it thinks fit in the public interest of the banking company or its depositors. Every banking company is required to furnish three copies of its accounts and balance sheet prepared in accordance with the provisions of Section 29 together with the auditors’ report to the Reserve Bank of India within three months from the end of the accounting period or year. Also, a banking company has to submit three copies of such accounts and balance sheet together with auditor’s report to the Registrar of Companies
under Section 31 of the Banking Regulation Act. Moreover, every banking company incorporated outside India has to display in a conspicuous place in its principal office and its every branch in India, a copy of its audited Balance Sheet and Profit and Loss Account not later than the first Monday in the month of August of any year. Every such copy so displayed can be replaced only by a copy of the subsequent Balance Sheet and Profit and Loss Account. ACCOUNTS AND AUDIT
CAclubindia
