BoM follows GAPP accounting system

MUMBAI, July 13: Chennai-based Bank of Madura (BoM) has gone one step ahead of its competitors by releasing the unaudited financial statements for 1997-98 prepared in substantial compliance with International Generally Accepted Accounting Principles (GAAP).

While the bank claims that the move — the first time an Indian bank undertaking such an exercise — is part of the bank’s plan to become a “truly international bank”. The international bench-mark adopted in preparing our balance sheet and accounting norms would certainly be useful to the shareholders, correspondent banks, institutions, international clients and non-resident Indians (NRIs), said the bank director G Rajasekhar. However, the balance sheet prepared in accordance with GAAP is neither signed by the bank directors nor audited by any auditors.

The bank which made an increase of 31 per cent in its net profit at Rs 34.19 crore for the year ended March 1998 has shown improvement of about Rs 15 crore in its net income through the process ofinternational accounting norms. In the first quarter of the current year, the bank’s deposits and advances remained at the same levels that of March-end.

In 1997-98, its deposits rose by 43.5 per cent to Rs 2772 crore. Its non-performing assets (NPAs) eased from 6.2 per cent to 5.7 per cent as on March 31. The bank has the capital adequary ratio of 13.72 per cent. In the years ahead, the bank would focusing its activity in technology upgradation, modernisation of branch networking and various fee-based activity, Rajasekhar said. The bank is also setting a subsidiary company for trading in government securities.