The funds set aside by the banks as fraction to the loans to cover up losses is called
The funds set aside by the banks as fraction to the loans to cover up losses is called __?
[A]Provisioning Coverage Ratio (PCR)
[B]Capital Adequacy Ratio (CAR)
[C]Loan to Coverage Ratio
[D]Cash Reserve Ratio
Provisioning Coverage Ratio (PCR)
For every loan given out, the banks to keep aside some extra funds to cover up losses if something goes wrong with those loans. This is called provisioning. Provisioning Coverage Ratio (PCR) refers to the funds to be set aside by the banks as fraction to the loans.