Query
Amendment in Schedule VI of the Companies Act by Notification No. GSR 78 dated 4th January, 1963, requires that amounts in respect of balances with “Scheduled Banks” should be disclosed separately from other Banks.
“Scheduled Bank” is defined by Section 5(1) (m) of the Banking Companies Act, 1949 as “a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934”. Classification in this respect in regard to accounts with banks situated in foreign countries presents difficulties, in that no such distinction exists in respect of foreign branches of the Banks, which may again be Indian or foreign.
Which of the following bank accounts should be grouped as bank balances with Scheduled Banks?
(a) Foreign branches of Banks incorporated in India, the names of which Banks are included in the aforementioned Schedule e.g., Decca branch of X Bank Ltd.
(b) Foreign branches of Banks incorporated outside India, Indian branches of which banks only are included in the aforementioned Schedule—e.g., Dacca branch of Y Bank of Pakistan Ltd. Which was only Calcutta Branch in India.
(c) Foreign branches of Banks incorporated outside India which have no Indian branches and as such no names in this respect are included in the aforementioned Schedule, say, Z Bank Ltd.
Opinion June 4, 1969
A ‘Scheduled Bank’ is defined in Section 2(e) of the Reserve Bank of India Act, 1934, and therefore in the Committee’s view any deposit with such a bank including deposits with branches situated abroad of such a bank should be treated as deposits with a Scheduled Bank Accordingly, in the opinion of the Committee the replies to the questions raised are as follows:
(a) Deposits with the foreign branch of an Indian bank which is a scheduled bank should be treated as a deposit with a scheduled bank.
(b) Deposit with the foreign branches of foreign banks who have offices in India and who are considered to be scheduled banks should also be treated as deposits with scheduled banks.
(c) Deposits with foreign branches of banks having no offices in India cannot be considered as deposits with the scheduled banks, as, in any event, their names will not appear in the schedule to the Reserve Bank of India Act.
For full list of scheduled bank, please download attached file.
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