Banking · Schedule 9 - Advances

The classification of advances is one of the most scrutinized areas in bank accounting because it directly impacts risk weightage and capital adequacy. Schedule 9 requires a three-way classification of advances: by nature, by sector (security), and by geographical location. Statement I: Advances must be classified as bills purchased and discounted, cash credits/overdrafts/loans repayable on demand, and term loans, and the total of these three must match the total of advances classified by sector. Statement II: In the classification by sector, 'Priority Sector' advances must be shown as a separate sub-category within the 'Advances in India' section to comply with RBI's mandatory lending targets. Statement III: Advances classified as 'Unsecured' in Schedule 9 include only those where the bank has no collateral at all, and any advance partially covered by security must be shown as 'Secured' to the full extent of the loan. Which of the statements given above are correct?