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Bankrupted bank

CS Alok Mishra (Income Tax Practitioner) (786 Points)

28 January 2012

Hallo everybody. At very first A very HAPPY SARASWATI PUJA to u all.

I have a client who had a Fixed Deposit with a co-operative bank of Rs. 50,000 and till 31.03.2010 accrued interest as per Balance sheet is Rs.41000. Now when i asked the client, he told me that bank is no more in existence and no chance to recover that money.

Now i am in confusion that whether to show that F.D. in Balance sheet or what else?

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6 Replies

kanagaraj (CHARTERED ACCOUNTANT) (793 Points)
Replied 28 January 2012

Dear Alok,

you may adjust the FD against the current account of the firm and since the interest income has shown as revenue already you may write it as baddebts.

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CS Alok Mishra (Income Tax Practitioner) (786 Points)
Replied 28 January 2012

Sir its not a firm. Its an individual lady who is housewife and have nothing very special in her B.S. . His husband maintains her file to take loans etc.

valji (Accounts manager-MBA) (2150 Points)
Replied 28 January 2012

whether RBI can not give step for recover middle man money

where we can apply for recover FD

i have also same problem FD with co-oprative bank

CS Alok Mishra (Income Tax Practitioner) (786 Points)
Replied 28 January 2012

Mr. Valji, as you can understand that an individual never possess that much power and guts to go to RBI due to many problems e.g. Buereaucracy, Bribery, Misbehaviour of employees, Non-respose etc. etc. etc.

If assessee will go to RBI or somewhere else then more than FD amount will go in Bribery and ultimately nothing will be in her hand except passimistic thought.

As in the case of my client , she is a middle class Indian lady who believes in a happy family and gives value to Family and respect more than money.

I JUST WANT TO KNOW ACCOUNTING TREATMENT.