MOST ESSENTIAL REQUIREMENT OF SOUND BANK BUSINESS

Bank keeps accounts not only for the purpose of finding the cost of an article, or certain services, but also for finding the exact amounts owing to and by industrial and commercial concerns. In this regard, FBL is very careful because failure to keep proper accounts not only affects its credit, but it may also land it in difficulties. Sometimes even businessmen depend upon their bank records in the matter of their financial dealings. Bank cannot afford to be careless in the, matter of accounting, and therefore, this department has been placed under a competent senior officer of the Bank.

OBJECTS OF KEEPING PROPER ACCOUNTS BY BANKS

The chief objects with which bank accounts are kept, are the following: To have a chronological account of all transactions done by the Bank, as it must be able to produce sufficient proof of what it does from day to day. These running accounts are very important. To know the exact amounts owing to and by the Bank. Unless the Bank knows what are exact amounts due from various customers, it cannot possibly make demands upon them. Similarly, unless a Bank knows what are the amounts owing by him to his customers, it cannot honour their cheque and make other payments required by them. To know its exact position at all times and, thus, to find whether or not the business is making progress.

OBJECTS OF KEEPING PROPER ACCOUNTS-IN SYSTEM TERMS

Main functions of record keeping, in system term are the provision of information and implementation of control.

BAD DEBTS
Multan branch does not have any bad debts. Accounts Department has, however, created a general provision for bad debts.

CURRENT ACCOUNTS
Under the Islamic financial system as governed by the glorious Sharias, clients wishing to deposit funds with an Islamic financial institution and seeking their guaranteed return do not receive any income or benefit. Such funds are indicated as current accounts and Bank treat these as loans from the customer to the Islamic financial institution repayable on first demand. Bank chooses to make use of such funds for investment purpose on its own risk. Current account funds are treated as the Banks liability and are reported above the line in the Banks balance sheet.

DEPOSITS ACCOUNT
An investor can deposit his amount in the Deposit Account in FBL if he wants to receive benefits, if accruing, from the investment of his funds. The depositor assumes all the risks inherent in the investment of such funds. Faysal Islamic Bank guarantees the return of the principal only not profit. Only in the case of gross negligence on the part of the Bank, which is

proved as such, the Bank is liable for making good losses incurred owing to such proved gross negligence.

BASIS OF ACCOUNTING FOR CASH

FIFO basis is used for the cash in the main safe.

ACCOUNTING CONVENTIONS
Bank record of savings accounts shows all deposits, withdrawals, and dilly balance in account. Rank record of current accounts shows all deposits and withdrawals.