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  2. rbi.org.in › scripts › BS_ViewMasCirculardetailsReserve Bank of India - Master Circulars

    Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to gross non-performing assets and indicates the extent of funds a bank has kept aside to cover loan losses. ii. From a macro-prudential perspective, banks should build up provisioning and capital buffers in good times i.e. when the profits are good, which can be used ...

  3. www.indianeconomy.net › splclassroom › what-isWhat is provisioning? What is Provisioning Coverage Ratio?

    Jan 29, 2016 · Learn what provisioning is and how it is calculated for different types of assets in the banking sector. Provisioning coverage ratio is the percentage of bad assets that the bank has to provide for from their own funds.

  4. scripbox.com › pf › provision-coverage-ratioProvision Coverage Ratio: Meaning, Importance, and Calculation

    • What Is A Provision Coverage Ratio?
    • Importance of Provision Coverage Ratio
    • How to Calculate Provision Coverage Ratio?
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    Provisions are set aside by businesses in case they are anticipating any losses or unexpected bad loans. It is mandatory for Indian banks to create a provision fund to cover their anticipated bad loans, and this is the provision coverage ratio. Banks set aside provisions for bad loans from the bank’s own funds, mostly from the profits. Also, it is ...

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    Banks set aside a portion of their profits as a provision against bad loans to deal in times of default (prospective losses).
    The PCR helps in estimating the financial health of a bank. PCR of 70% is the benchmark as set by the RBI. A high PCR is good.
    Higher provision coverage ratio means the bank is not vulnerable and the asset quality issue is taken care.
    The PCR helps in understanding the asset quality. Lower the asset quality, high will be the PCR.

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    PCR is the ratio of provisions to gross NPAs. The formula to calculate Provision Coverage Ratio (PCR) is as follows Provision Coverage Ratio (PCR) = Provisions/Gross NPA A PCR of 70% or more tells us that the bank is not at risk and the asset quality is taken care of. Also, the bank will be strong enough to withstand NPAs. Discover More

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    Learn what provision coverage ratio (PCR) is, why it is important for banks, and how to calculate it. PCR is the ratio of provisions to gross NPAs, and RBI sets a benchmark of 70% for Indian banks.

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  6. bankingschool.co.in › risk-management › what-isWhat is Provisioning Coverage Ratio? – Banking School

    Apr 28, 2018 · Provisioning Coverage Ratio (PCR) is the percentage of funds set aside by banks to cover bad loans. Learn how to calculate PCR, slippage ratio, and non-performing assets (NPAs) with examples and prudential norms.

  7. fastercapital.com › content › Provision-CoverageProvision Coverage Ratio: Why Provision Coverage Ratio ...

    Jun 28, 2024 · 1. Understanding Provision Coverage Ratio. 2. Importance of Asset Quality Rating in Loan Loss Provisioning. 3. Exploring the Concept of Provision Coverage Ratio. 4. Factors Affecting Provision Coverage Ratio. 5. Analyzing the Relationship between Provision Coverage Ratio and Asset Quality Rating. 6.

  8. www.investopedia.com › terms › cCoverage Ratio Definition, Types, Formulas, Examples

    Sep 29, 2020 · Learn what a coverage ratio is and how it measures a company's ability to service its debt and meet its financial obligations. Compare different types of coverage ratios, such as interest coverage ratio, debt service coverage ratio, and asset coverage ratio, with examples and formulas.

  9. fastercapital.com › content › Provision-CoverageProvision Coverage Ratio: What is Provision Coverage Ratio ...

    Jun 24, 2024 · 1. Introduction to Provision Coverage Ratio. 2. Understanding Asset Quality Rating. 3. Definition of Provision Coverage Ratio. 4. Calculation Methodology of Provision Coverage Ratio. 5. Significance of Provision Coverage Ratio in Assessing Asset Quality. 6. Factors Affecting Provision Coverage Ratio. 7. Interpreting Provision Coverage Ratio Results