How the bank is judged

Provision Coverage Ratio (PCR): how prepared is the bank for its bad loans?

The share of a bank's bad loans it has already set aside provisions against.

Why it matters

PCR is the shock-absorber gauge — high means the pain's been taken, low means more losses are still coming. The one second-order number to know beyond gross NPA.

A worked example

₹60 cr provided against ₹100 cr of bad loans = 60% PCR; analysts like to see ~70%+.

The picture

What it leads to

PCR is built from provisioning over gross NPAs — it tells you how much of the implied loss is already absorbed.

Where it sits in the map

Follow the causation

this is the numerator of PCRProvisioning→this is the denominator of PCRGross & Net NPA ratio→this is where the underlying bad loans are gradedAsset classification (standard → loss)→