This guide explains a topic and a method for reading related news. It does not report a newly announced event. Check the issuing authority for current facts.
01 / UNDERSTANDING
Reading the news
In reports about bank balance sheets, separate customer funding from income. An increase in deposits changes liabilities and funding capacity, while profit requires a different accounting analysis. Ask whether the reported change affects an asset, a liability or an income item. A balance-sheet expansion can be substantial without representing an equal increase in net worth. State the accounting viewpoint before interpreting what the reported inflow means for the institution.
02 / UNDERSTANDING
The concept in context
Bank and customer records use different perspectives. When cash is deposited, the bank receives an asset and recognises a deposit liability. The customer's cash holding falls while a claim on the bank rises. Both records describe the same event using different accounting entities.
03 / UNDERSTANDING
A worked learning case
A trader deposits ₹8,000 in cash. On simplified bank books, cash increases by ₹8,000 and the customer's deposit liability increases equally. In the trader's books, cash decreases and bank balance increases. The exercise deliberately excludes fees and other adjustments so the two perspectives can be compared cleanly.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
What balances a bank's increase in cash when a customer makes a simple cash deposit?
Show the answer and reasoning
An increase in the deposit liability.
The bank now holds additional cash but also owes the depositor the same amount under the account relationship. Recording only the cash asset would overstate the bank's net worth. The paired liability explains why receiving customer money is not automatically equivalent to earning revenue.
Two traps to watch for.
- Describing every debit as a reduction regardless of account type.
- Recording customer deposits as earned bank revenue.
YOUR TOPIC-SPECIFIC LEARNING MAP
Evidence to check
Write the accounting equation before entering the cash deposit.
Record the bank's asset and liability movements together.
Repeat the transaction from the trader's accounting perspective.
Explain the idea, apply it to a new situation, then check what changed in your reasoning.
BANKERS TUTORIAL · SOURCE NOTES
Keep the source alongside your notes.
Official links provide subject context and authoritative reference material. This guide’s explanation, scenario and question are original Bankers Tutorial learning content.
- iibf.org.in https://iibf.org.in/diploma-banking-finance
- www.iibf.org.in https://www.iibf.org.in/documents/RulesSyllabus/2026/42_DBF-Final_23_2_26%20_Final_website_12_03_2026.pdf
- www.rbi.org.in https://www.rbi.org.in/commonperson/English/Scripts/PressReleases.aspx?Id=2123
For DBF preparation, check the current official notice before relying on changing dates, rules or examination requirements.
