Provisioning Coverage Ratio – As a macro-prudential measure, banks were required to maintain PCR of 70 per cent of gross NPAs with reference to the position as on end-September 2010. The surplus of the provision over and above the prescribed prudential norms should be segregated into a separate account styled as “counter-cyclical provisioning buffer” which will be allowed to be used during periods of system-wide downturn with the prior approval of the Reserve Bank. This was intended to be an interim measure till such time the Reserve Bank introduces a more comprehensive methodology of counter-cyclical provisioning taking into account the evolving international standards.
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