Under the Banking Regulation Act, banks cannot hold immovable property (except for own use) for more than 7 years. Properties acquired from defaulters to recover loans are termed "Non-Banking Assets".

These are off-balance sheet items where the bank has a potential liability (e.g., Letters of Credit, Guarantees) that will crystallize only if the customer defaults. They are reported in Schedule 12.

In Form B (P&L Account of a Bank), there is a specific head called "Provisions and Contingencies" where provisions for NPAs, Tax, and Diminution in Investments are recorded.

Schedule 8 (Investments) includes investments in Government securities, Shares, Debentures, and Gold . It is not treated as Cash.

Unlike Gold (which is an Investment), Silver is typically classified under Schedule 11: "Other Assets" in the banking balance sheet format.

CRAR measures a bank's capital against its risk. The denominator is Risk Weighted Assets (RWA), not Total Assets.

Bills for Collection is a service where the bank acts as an agent. It is neither an asset nor a liability of the bank until realized. It is shown as a footnote.

If the net balance of Inter-Office Adjustments is a Debit, it represents an asset (receivable) and is shown under Schedule 11. If it is a Credit, it is shown under Schedule 5 (Liabilities).

Schedule 6 specifically covers Cash in hand and Balances with the Reserve Bank of India. Schedule 7 covers balances with OTHER banks.

When a bank discounts a bill, it deducts interest for the full period upfront. If the bill matures in the *next* accounting year, the portion of interest relating to the next year is "Income Received in Advance" and is shown as a liability (Rebate on Bills Discounted).

RBI mandates disclosure of divergence if the additional provisioning required exceeds 10% of reported net profit OR if the additional Gross NPA exceeds 10% (was 15% earlier) of reported Gross NPA.

The statutory format requires classification by nature of facility: A. Bills Purchased and Discounted, B. Cash Credits, Overdrafts and Loans repayable on demand, C. Term Loans.

The schedules are fixed: 1-Capital, 2-Reserves, 3-Deposits, 4-Borrowings, 5-Other Liabilities. On Asset side: 6-Cash, 7-Balances with Banks, 8-Investments, 9-Advances.

PCR measures the cushion a bank has against its bad loans. It is calculated as (Total Provisions held for NPAs / Gross NPAs) * 100.

Provisioning norms for Secured Doubtful Assets: D1 (up to 1 year) = 25%; D2 (1-3 years) = 40%; D3 (>3 years) = 100%.

SLR assets include Cash, Gold, and Unencumbered Approved Securities. Balances with other banks are NOT eligible for SLR (only excess balance with RBI is).

Discounting a bill is effectively lending money to the customer against the security of the bill. Hence, it is an Advance (Loan).

Schedule 7 covers "Balances with Banks and Money at Call and Short Notice".

RBI mandates 0.25% provision for standard assets in Agriculture and SME sectors. For commercial real estate, it is higher (1% or 0.75%). For general advances, it is 0.40%.

Banks collect discount upfront. If a bill matures next year, the portion of discount relating to next year is "Income Received in Advance," which is a liability as per the Accrual Concept.

Deposits are actual liabilities (Schedule 3). Guarantees become liabilities ONLY if the customer defaults. Hence, they are Contingent Liabilities (Schedule 12).

Regardless of the period for which the asset has remained doubtful (D1, D2, or D3), the unsecured portion (not covered by realizable value of security) must be fully provided for (100%).

Undrawn limits are commitments. They do not appear on the BS as assets or liabilities until the customer actually draws the money. However, they represent a potential liquidity demand.

As per the Banking Regulation Act format, Silver is not considered an approved security for investment purposes in the same way as Gold. It is classified under Schedule 11 (Other Assets).