BRBL CAIIB notes – Unit 4
Unit-4 Returns, Inspection, Winding Up, Mergers & Acquisitions
Annual accounts and Balance sheet
- U/S 29 of B R Act, all banks are to prepare a balance sheet and a profit and Loss
account on the form as per Schedule III, as on last day of each financial years (announced by Central Govt. – presently 31st March)
- Balance sheet and profit/loss account is to signed by at least 3 directors where no. is more than 3 or all directors, where the no. is up to 3.
- U/s 30, balance sheet and P/L account is to be audited by a qualified account.
U/s 30 (IB), RBI can order special audit of accounts. Auditor Liable, if bank is found insolvent afterwards.
- U/s 31, balance sheet and P/L account are to be published in a newspaper in circulation at place of principal office of the bank, within 6 months.
- Banks that are listed on stock exchange have to publish their un-audited quarterly results as per SEBI prescribed Performa.
- Banks are to furnish to RBI 3 copies of balance sheet and P/L account within 3 months. Period can be extended by RBI by another 3 months.
- U/s 32, banking companies are to furnish 3 copies of balance sheet and P/L account to Registrar of Companies.
Returns to RBI
- Monthly Return on liquid assets U/s 24 (3) of B R Act, banks are to submit return within 20 days from end of month, to which it relates.
- Monthly Return of assets and liabilities in India : U/s27 of B R Act, monthly return as on last Friday to be submitted before close of the next month.
- Quarterly return of assets in India U/s 25 (1) B R Act to be submitted within one month on form 14A.
- Yearly return on unclaimed deposits U/s 26 of BR Act to be submitted within 30 days.
- Accounts and balance sheet : To be submitted within 3 months from close of financial year.
- Fortnightly return on CRR :U/s 42 of RBI Act to be submitted within 7 days on form No. 20A.
Record preservation & return of paid instruments
- Preservation of records: U/s 45Y of B R Act, Central Govt. can make rules (Banking Companies Preservation of Records Rules 1985) specifying the period of preservation of books, accounts and other documents.
- Banks also to maintain record of transactions at least for 5 years (from date of transaction) , as per requirement of PML Act.
- Return of paid instruments : U/s 45Z of B R Act, banks can return paid instruments to their customers even before period specified for preservation of records, by keeping a true copy.
Inspection and scrutiny
Inspection
- U/s 35 B R Act, RBI has powers to conduct inspection of banks.
- Central Govt. can also direct RBI to carry inspection of banks. Copy of such report to be sent to Govt.
- Inspecting officers are authorised to examine any director/officer of the banking company on oath.
- U/s 35(1A), RBI can conduct scrutiny of affairs and books of a banking company.
Power of Central govt.:
- In the interest of depositors, the govt. can prohibit the banking company from receiving fresh deposit
OR
- direct RBI to apply to winding up of banking company (U/S 38 BR Act).
Acquisition by Govt.