The document outlines the key components of a profit and loss account for banking companies in India. It discusses that a profit and loss account summarizes revenues, costs, and expenses over a financial year to calculate profit or loss. It then describes the various schedules that make up a bank's profit and loss account, including interest earned and expended, other income, and operating expenses. The profit or loss is then appropriated to reserves, dividends, or transferred to the balance sheet.

1. PROFIT AND LOSS ACCOUNT OF
BANKING COMPANIES
PRESENTED BY:
ANAND SARAN
142005

2. PROFIT AND LOSS ACCOUNT
• A summery of the revenues, costs and expenses
incurred during a specific period of time
• Prepared to calculate the profit or loss of the
Organisation during one financial year .

3. FUNCTIONS OF A BANK
1. Receiving deposits from the public
2. Granting loans and advances
3. A bank performs certain functions as an agent
for and on behalf of its customers.
4. Other functions:
• Issuing letters of credit to its customers
• Issuing bank drafts
• Issuing travelers cheques
• Lockers

4. PROFIT AND LOSS ACCONT OF BANKING
COMPANIES
• Banking Business in India is governed by the
Banking Regulations Act 1949
• Section 29 of this Act lays down the provisions
regarding Accounts and Balance Sheet of a
banking company
• The profit and loss account is shown in ‘Form B’
of Schedule III of this Act

5. SCHEDULES RELATED TO PROFIT AND
LOSS ACCOUNT
The schedules related to the calculation of income
and expenses of a bank are as follows:
• Schedule 13: Interest Earned
• Schedule 14: Other Incomes
• Schedule 15: Interest Expended
• Schedule 16: Operating Expenses

6. FORM B: PROFIT AND LOSS ACCOUNT
I. Income
Interest earned (Schedule 13)
Other income (Schedule 14)
Total
II. Expenditure
Interest expended (Schedule 15)
Operating expenses (Schedule 16)
Provisions and contingencies
Total
III. Profit / Loss
Net profit / loss (-) for the year
IV. Appropriations
V. Balance carried over to Balance Sheet

7. SCHEDULE 13: INTEREST EARNED
• Interest/discount on advance/bills
• Income on investments
• Interest on balances with Reserve Bank of India
and other Inter bank funds
• Others

8. SCHEDULE 14: OTHER INCOME
• Commission, exchange and brokerage
• Profit on sale of investments
(Less: Loss on sale of investments)
• Profit on revaluation of investments
(Less: Loss on revaluation of investments)
• Profit on sale of land, buildings and other assets
(Less: Loss on sale of land, buildings and other
assets)
• Profit on exchange transactions
(Less : Loss on exchange transactions)
• Income earned by way of dividends, etc. from
subsidiaries/ companies and/or joint ventures
abroad/ in India
• Miscellaneous income

9. SCHEDULE 15: INTEREST EXPENDED
• Interest on deposits
• Interest on Reserve Bank of India/Inter bank
borrowings
• Others

10. SCHEDULE 16: ORERATING EXPENSES
• Payment to and provisions of employees
• Rent, taxes and lighting
• Printing and stationery
• Advertisement and publicity
• Depreciation on bank's property
• Director's fees, allowances and expenses
`

11. Cont.
• Auditor’s fees and expenses (including branch
auditors)
• Law charges
• Postages, Telegrams, Telephones, etc.
• Repairs and maintenance
• Insurance
• Other expenditure

12. APPROPRIATION OF PROFITS
• Transfer to statutory reserves
• Transfer to other reserves
• Transfer to government/ Proposed dividend
= Final Balance Transferred to the Balance Sheet
(Transferred to the liabilities side under the
head ‘Reserves and Surplus’)