Why Maintaining Balance Sheet Is Important? Know Here

by Vinita Amesar
Balance Sheet

Banking has been making our life easier since always. Banking is the easiest and safest way to keep your money protected. With the help of a bank, we can also earn money. Bank provides interest in our money kept at the bank. They provide different interest rates under different schemes. Some of which help us to earn a lot. They lend money to which helps us in settling our business, buying a home, educating a child, etc. These are some of the basic services given by the bank.


Banking Balance Sheet

A banking balance sheet is detailed information of assets, liabilities, and capital of any organization or business. The list of assets is on the right side, and the left is liabilities. The balance sheet tells about the position of our business at a particular point in time. Assets and liabilities of the bank are explained further:

  • Assets of Banks: Banks also have some assets like we individually do. The main assets of banks are the loan they provide to their customers. The banking balance sheet assets are somewhat the same as individuals. Bank has assets account that helps them in earning money like cash, government securities, interest on the loan, etc. The physical assets of the bank are its building from where the bank is being operated; the furniture bank is using and all their other equipment. Interest earned from different types of loans like a car loan, home loan, education loan, etc.
  • Liabilities of Banks: There are many liabilities of a bank. Basically what bank owes to others are its liabilities like interest paid to the customers, on saving accounts, fixed deposits, and many other schemes. If the bank owns the building, it will be an asset for the bank, but if not the money paid to the creditor is a liability. Interests in stock and certificates deposits are also the liabilities of a bank.

These are some of the assets and liabilities of the bank, which includes a balance sheet and tells about the current position. The banking balance sheet tells us about the health of the institution. Thus it has to be maintained regularly.



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