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CS Professional · Banking and Insurance - Laws and Practice · Analysis of Financial Statements of Banks

Godavari Bank has deposits of Rs 900 crore from customers. Its Schedule 3 (Deposits) is being prepared. It has demand deposits of Rs 150 crore, savings bank deposits of Rs 350 crore and term deposits of Rs 400 crore. How should these be presented?

Schedule 3 presents deposits under demand, savings bank and term deposit heads, which add up to Rs 900 crore. Savings deposits are not borrowings and deposits are not offset against advances in the balance sheet.

  1. ASchedule 3 shows demand, savings and term deposits as separate heads, totalling Rs 900 croreCorrect
  2. BOnly term deposits are shown, as demand and savings deposits are current liabilities
  3. CSavings deposits are shown under Borrowings, total deposits being Rs 550 crore
  4. DDemand deposits are netted against advances, leaving deposits Rs 750 crore

Explanation

Schedule 3 classifies deposits into demand deposits, savings bank deposits and term deposits; 150 + 350 + 400 = Rs 900 crore. Savings deposits are not borrowings, and liabilities are not netted against advances.

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