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Features of Bank Accounts

A bank deals in money and the number of transactions is very large. As such there are greater chances of fraud. To check this there should be an efficient system of internal check and internal control. Banks follow continuous audit system. Therefore, there is an imperative need to have foolproof and elaborate accounting system for a bank. The accounting system of a bank has to be devised in such a manner that there is built-in-system of audit of such accounts. The Banking Regulation Act, 1949 has made provisions regarding the accounts and audit of a banking company. An important feature of bank’s accounts is that the entry of a transaction must be made on the very (same) day the transaction takes place. It is necessary in order that before closure of the bank on that day the balance in the bank’s books may be verified. Moreover, for a bank manager it is necessary to know day to day progress of the bank. This is possible only when the entries relating to deposits and loans are made in the concerned account on the same day.
Salient Features of Bank’s Accounts:
1. Number of transactions is very large.
2. Bank’s account have to be maintained as per Double Entry System of Accounting.
3. Cash transactions and transfer entries occupy an important place in financial
transactions of a bank.
4. All the transactions are entered in the books on the same day.
5. The transactions are recorded in the order in which they take place.
6. A bank may maintain separate books of accounts to record transactions with government and non-government customers.
7. Regular returns and statements relating to deposits and advance are to be prepared and filed.
8. Final account to be prepared in a very short period of time as such information has to be updated regularly.
 9. Elaborate internal check and internal control systems have to be established. 10. An elaborate system of continuous audit has to be introduced.
Books of Account (Section 209)
The Companies Act, 1956 requires a banking company to maintain at its registered office proper books of account with respect to
1. all receipts and disbursements of money and the matters in respect of which the receipt and disbursements take place.
2. the assets and liabilities of the bank. Where a banking company has a branch office, books of accounts relating to the transactions effected at the branch office shall be kept at the branch. At an interval of not more than 3 months, summarized accounts shall be sent to the banking company at its registered office.

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