Accounting, Records and Practical Banking Skills
This domain tests double-entry accounting in a bank, reconciliation of records, and the branch-level skills of documentation, cash handling and clearing.
Bank accounting
Every transaction has two effects. The golden rules are: debit the receiver and credit the giver for personal accounts; debit what comes in and credit what goes out for real accounts; debit expenses and losses and credit incomes and gains for nominal accounts. A customer’s deposit is a liability for the bank, so the bank credits the customer’s ledger. The main records are the day book, cash book, subsidiary books, customer ledgers and general ledger.
Reconciliation
A bank reconciliation statement explains the difference between the cash book and the passbook or bank statement. Common causes are cheques issued but not presented, cheques deposited but not credited, bank charges, interest allowed, direct debits and errors.
Practical skills
Branch work requires KYC records, signature verification, cash receipt and payment, counterfeit-note detection, clearing and CTS handling, AML monitoring and record retention.
Worked example
On 31 March the cash book shows a debit balance of ₹50,000. A cheque of ₹5,000 issued is not presented; bank charges are ₹200; a deposit of ₹3,000 is not credited. Balance as per passbook = 50,000 + 5,000 − 200 − 3,000 = ₹51,800. A cheque issued but not presented increases the passbook balance; an uncredited deposit and bank charges reduce it.
Traps
Remember that the bank’s debit is the customer’s credit. Bank charges reduce the customer’s balance but are income for the bank. Cheques issued but not presented are added when starting from the cash book; deposits not credited are subtracted. Do not reverse the direction of the reconciliation.