Indian banking regulation act 1949's Schedule III's part B form is available which shows the profit and loss account of any bank. With this structure, any bank can make its profit and loss account.
{A} Income Side of Profit and Loss Account
In this side, we will show different incomes of bank. schedule 13, 14 have been included in it.
Schedule 13 : Interest Earned
Bank's main income is interest. Bank earns interest on its given loan, investment and balance in RBI. It may earn on other govt. securities.
Schedule 14 : Other Incomes
All income except interest will be other income of bank. In these incomes, we can include commission, exchange profit, brokerage, rent, profit on sale of investments, profit on revaluation of investments, profit on sale of land, building, and other assets, profit on foreign exchange transactions, income earned by the way of dividend etc.
{B} Expenses Side of Profit and Loss Account
For calculating net profit of bank, we have to show all the expenses of bank in profit and loss account. following are its main expenses.
Schedule 15 : Interest Expended
Bank pays interest on deposits of its customers and interest on the loan taken from RBI or other banks.
Schedule 16 : Operating Expenses
For operating banking business, bank pays rent, taxes, lighting charges, salaries to employees, advertisements, directors fees, auditors fees, law charges, repairs, insurances and other expenses. It also certain losses on the sale of asset or depreciation
{A} Income Side of Profit and Loss Account
In this side, we will show different incomes of bank. schedule 13, 14 have been included in it.
Schedule 13 : Interest Earned
Bank's main income is interest. Bank earns interest on its given loan, investment and balance in RBI. It may earn on other govt. securities.
Schedule 14 : Other Incomes
All income except interest will be other income of bank. In these incomes, we can include commission, exchange profit, brokerage, rent, profit on sale of investments, profit on revaluation of investments, profit on sale of land, building, and other assets, profit on foreign exchange transactions, income earned by the way of dividend etc.
{B} Expenses Side of Profit and Loss Account
For calculating net profit of bank, we have to show all the expenses of bank in profit and loss account. following are its main expenses.
Schedule 15 : Interest Expended
Bank pays interest on deposits of its customers and interest on the loan taken from RBI or other banks.
Schedule 16 : Operating Expenses
For operating banking business, bank pays rent, taxes, lighting charges, salaries to employees, advertisements, directors fees, auditors fees, law charges, repairs, insurances and other expenses. It also certain losses on the sale of asset or depreciation
Comments