BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Profit Credit Ratio
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Provision Credit Ratio
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Provision Coverage Ratio
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Provision Cash Ratio
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Detailed explanation-1: -Provisioning Coverage Ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts. Capital Adequacy Ratio or CAR is the ratio of the bank’s capital to its credit exposure.
Detailed explanation-2: -Provision coverage ratio (PCR), on the other hand, refers to the percentage of funds created against NPAs. A higher PCR ratio reflects that the bank has sufficient capital to withstand asset quality pressures and will not need significant incremental capital in case of extreme stress.
Detailed explanation-3: -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.
Detailed explanation-4: -1. provision coverage ratio (PCR) is the ratio of provisioning to gross non-performing assets. 2. It indicates the extent of funds a bank has kept aside to cover loan losses.
Detailed explanation-5: -Definition: Put-call ratio (PCR) is an indicator commonly used to determine the mood of the options market. Being a contrarian indicator, the ratio looks at options buildup, helps traders understand whether a recent fall or rise in the market is excessive and if the time has come to take a contrarian call.