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What is theo balance - bank branch audit

CA. Umesh kumar (ca.umesh11@gmail.com) (1394 Points)

16 April 2014  

What is theo balance, outstanding balance in banks loan account. 

 2 Replies

sathianarayanan.t (chartered accountant) (267 Points)
Replied 18 April 2014

Theo balance means theoratical balance.  This balance is computed by the system on the basis of EMI payable by the borrower and how much amount may be outstanding in a borrower account on a particular day.  For example, in a term loan account Mr x got Rs. 10 lakhs loan with EMI of Rs. 10000 p.m.  As on 31.3.14, he had to pay 10 instalments i.e., Rs. 1 lakh.  The system will compute the theo outstanding balance as Rs. 9 lakhs + inter.  If the actual out standing amount is less than the theo balance, the account is regular and if it is more than theo balance, the account is irregular.

1 Like

Rachit Agrawal (2 Points)
Replied 24 November 2018

Sir, Please provide the method/ mechanism for calculation of theo balance. How can i verify that the system calculated theo balance and the interest thereon is correct? And does theo balance has anything to do with actual payment of EMI's? Thanku in advance.

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