(a) Accounting basis--An institution may maintain its books of account on a cash or accrual basis, as determined by its board of directors or trustees in the case of an incorporated institution and a private bank which has such a board and by the owner or partners in the case of any other private bank.

(b) Entries as to assets--An institution shall enter on its books a complete and accurate account of all its assets, whether the assets are in its name or the names of others, at values which shall not without the prior approval of the department:

(c) Entries as to liabilities--An institution shall enter on its books a complete and accurate account of its liabilities to its depositors, its borrowings (and any assets pledged therefor) and all other liabilities and shall maintain additional accounts for losses, overdrafts and expense charges.

(d) Accounting and bookkeeping service agreements--Whenever an institution may cause to be performed, by contract or otherwise accounting or bookkeeping services for itself, whether on or off its premises, the performance thereof will be subject to regulation and examination by the department to the same extent as if such services were being performed by the institution itself on its own premises. The institution shall notify the department of the existence of a service relationship within thirty days after the making of such service contract or the performance of the service, whichever occurs first. For the purpose of this subsection (d), “services” shall mean clerical, bookkeeping, accounting, statistical and other functions of the type covered by the Bank Service Corporation Act.²

(e) Penalties--A violation of the provisions of subsections (b) or (c) of this section shall be subject to the penalty provisions of this act.