Section 29 of the Banking Regulation Act, 1949: Accounts and Balance Sheet
Updated: September 13, 2026
Section 29 of the Banking Regulation Act, 1949 prescribes the basic statutory framework for preparation and authentication of the balance sheet and profit and loss account of a banking company. The accounts are required to be prepared in the forms set out in the Third Schedule to the Act, or as near to those forms as the circumstances admit.
- Banking companies must prepare a balance sheet and profit and loss account for the relevant accounting period.
- The prescribed format is the Third Schedule to the Banking Regulation Act, 1949.
- The financial statements must be signed by the persons specified in Section 29(2).
- The Central Government may amend the Third Schedule forms in accordance with Section 29(4).
- Current presentation and disclosure requirements are also governed by directions and instructions issued by the Reserve Bank of India.
Meaning and scope of Section 29
Section 29 deals with the form, preparation and authentication of a banking company's principal annual financial statements. For banking companies incorporated in India, the provision applies to the business transacted by the company. For banking companies incorporated outside India, it applies to business transacted through branches in India.
The provision should be read together with the Banking Regulation Act, 1949 on India Code, the Third Schedule to that Act and the applicable Reserve Bank of India directions on presentation and disclosures in financial statements.
Statutory text of Section 29
29. Accounts and balance-sheet.
(1) At the expiration of each calendar year or at the expiration of a period of twelve months ending with such date as the Central Government may, by notification in the Official Gazette, specify in this behalf, every banking company incorporated in India, in respect of all business transacted by it, and every banking company incorporated outside India, in respect of all business transacted through its branches in India, shall prepare with reference to that year or period, as the case may be, a balance-sheet and profit and loss account as on the last working day of that year or the period, as the case may be, in the Forms set out in the Third Schedule or as near thereto as circumstances admit.
Provided that with a view to facilitating the transition from one period of accounting to another period of accounting under this sub-section, the Central Government may, by order published in the Official Gazette, make such provisions as it considers necessary or expedient for the preparation of, or for other matters relating to, the balance-sheet or profit and loss account in respect of the concerned year or period, as the case may be.
(2) The balance-sheet and profit and loss account shall be signed -
(a) in the case of a banking company incorporated in India, by the manager or the principal officer of the company and, where there are more than three directors of the company, by at least three of those directors, or where there are not more than three directors, by all the directors; and
(b) in the case of a banking company incorporated outside India, by the manager or agent of the principal office of the company in India.
(3) Notwithstanding that the balance-sheet of a banking company is under sub-section (1) required to be prepared in a form other than the form set out in the company-law schedule referred to in the statutory text, the company-law requirements relating to the balance-sheet and profit and loss account apply so far as they are not inconsistent with the Banking Regulation Act.
(3A) The statutory text also contains a special rule regarding the period to which the profit and loss account relates, with "year" having the meaning assigned by sub-section (1).
(4) The Central Government, after giving not less than three months' notice of its intention by notification in the Official Gazette, may from time to time by a like notification amend the Forms set out in the Third Schedule.
Third Schedule forms and current RBI requirements
The Reserve Bank of India's Financial Statements - Presentation and Disclosures Directions state that commercial banks must prepare a balance sheet and profit and loss account in the forms set out in the Third Schedule to the Banking Regulation Act, 1949. The RBI also records that the Government of India specified the relevant forms by notification S.O. 240(E) dated March 26, 1992.
The same RBI framework contains instructions for compilation, presentation and disclosures in the notes to accounts. Accordingly, Section 29 should not be read in isolation when a bank is preparing statutory financial statements.
Signing of balance sheet and profit and loss account
For a banking company incorporated in India, Section 29(2) requires signature by the manager or principal officer and by the prescribed number of directors. Where there are more than three directors, at least three directors must sign. Where there are not more than three directors, all directors must sign.
For a banking company incorporated outside India, the balance sheet and profit and loss account are to be signed by the manager or agent of the principal office of the company in India.
Co-operative banks
Section 29 is also relevant to co-operative banks through Section 56 of the Banking Regulation Act, 1949, which adapts the provision for such banks. The RBI's current Financial Statements - Presentation and Disclosures Directions separately state the applicable reporting position for co-operative banks.
Practical legal significance
Section 29 establishes the statutory financial statement format for banking companies and links that format to the Third Schedule. The provision is important for annual reporting, audit, regulatory supervision and statutory disclosure. In practice, banks should read Section 29 together with Section 30 on audit, Section 31 on submission of returns, the Third Schedule and current RBI directions.
Legislative notes retained from the earlier text
1. Accounting-period language was inserted by Act 66 of 1988, Section 8, with effect from December 30, 1988.
2. References to banking companies incorporated "in India" and "outside India" reflect amendments made by Act 20 of 1950.
3. The transition proviso to sub-section (1) was substituted by Act 66 of 1988, Section 8.
4. Sub-section (3A) and its explanation were inserted by Act 66 of 1988, Section 8.