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    Question

    _________ is the ratio of provisioning to gross

    non-performing assets and indicates the extent of funds a bank has kept aside to cover loan losses.
    A Loan Ratio Correct Answer Incorrect Answer
    B Net NPA Correct Answer Incorrect Answer
    C Provisioning Coverage Ratio Correct Answer Incorrect Answer
    D Capital Adequacy Ratio Correct Answer Incorrect Answer
    E Stress Asset Ratio Correct Answer Incorrect Answer

    Solution

    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. It was decided that banks should augment their provisioning cushions consisting of specific provisions against NPAs as well as floating provisions, and ensure that their total provisioning coverage ratio, including floating provisions, is not less than 70 per cent.

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