Page 48 - MA - May 2017

COVER ST OR Y

(ii) Cost per Rs 100/- outstanding balance in case of The cost of operation of one safe deposit locker
deposits and advances (loans) and cost per Rs100/- was Rs47/-, Government receipts was Rs21/- and
of quantum of turnover in case of transactions, Government Payments was Rs27/-.
i.e., Demand Draft/ Pay order/ NEFT/ RTGS issued/
paid, Government Receipts/ Payments, cheques/ 4. Other Instruments:
bills inward/ outward collection, etc. Cost of outstation cheques collected for clearing
(iii) Cost per account per annum. was Rs14/-.

Activity wise Cost (A Case of a Bank) (As of March Break Even Analysis for Deposits/ Advances Accounts:
1996):
a) Deposits
a) Deposits
The cost per voucher for savings bank was Rs9/- i) Current Account:
and current account was Rs12/- and term deposita Cost per Account per Annum
was Rs42/-. The cost per voucher for total deposits Rs 497
were Rs13/- Yield on Advances
The cost per account per annum for current account 13%
perannum for current was Rs498/-; savings bank Break Even Point (BEP) = Fixed Expenses/
was Rs94/- and for Time Deposit was Rs163/-. Contribution

b) Loans and Advances = 497/0.13 = RS 3827 = RS 3900 (Say)
The cost per account for total advances was Rs35/-,
the cost for agricultural lending was Rs80/-. ii) Savings Bank Account:
The cost per account per annum for total advances Cost per Account Rs 94
was RS783/-. The Industry and Trade Sector cost Interest Cost (average) 4
was Rs1040/-, other advances Rs738/-, other Yield on Funds 13%
priority sector lending was Rs659/-, Agricultural BEP = 94/ 0.13 – 0.4 = RS 1045 = RS 1100.00 (Say)
was Rs277/- and Small Sector Industries Rs151/-.
iii) Time Deposits:
c) Other Activities Cost per Account Rs 163
Interest Cost (average) 10%
1. Remittances: Yield on Funds 13%
The cost of a Demand Draft issue was Rs25/-, BEP = 163/ 0.13 – 0.10 = RS5430 = RS 5500.00
Paying a Demand draft was Rs41/-, issuance of (Say)
a Telegraphic Transfer was Rs83/-, Paying a TT
was Rs65/-, issuance of a Pay Order was Rs29/- b) Loans and Advances
and paying a Pay Order was Rs 21/-, issuance of
aMail Trnafer was Rs79/- and Paymnet of MT was i) Small Scale Industries:
Rs64/-. Cost per Account Rs 151
Yield on Advances 12%
2. Bills: Cost of Funds (average) 7.5%
The cost to collect outward cheques/ Demand BEP = 151/ 0.12 – 0.075 = RS 3359 = RS 3400.00
Drafts was Rs14/- and the bills was Rs71/-. Inward (Say)
cheques/ Demand Drafts was Rs8/- and Bills was
Rs54/- ii) Agricultural:
Cost per Account Rs 277
3. Others: Yield on Advances 12%
The cost to issue an inland letters of credit was Cost of Funds (average) 7.5%
Rs669/- and Bank Guarantees was Rs356/-. The BEP = 277/ 0.12 – 0.075 = RS 6165 = RS 6200.00
cost of each foreign transaction was Rs299/-. (Say)

48 The Management Accountant l May 2017 www.icmai.in