---
title: "Provisioning Coverage Ratio (PCR): Meaning | Model Diplomat"
description: "The Provisioning Coverage Ratio (PCR) measures bank provisions against gross NPAs. RBI set a 70% floor in 2009. Key UPSC GS3 banking concept explained."
url: "https://modeldiplomat.com/learn/glossary/provisioning-coverage-ratio"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Provisioning Coverage Ratio is the proportion of funds a bank sets aside against its gross non-performing assets to cushion potential loan losses.
- What is the regulatory minimum PCR prescribed by the RBI?
- How does PCR differ from the Net NPA ratio?
- Why can a high PCR be misleading?
- How will Expected Credit Loss norms affect PCR?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

The Provisioning Coverage Ratio is the proportion of funds a bank sets aside against its gross non-performing assets to cushion potential loan losses.

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In its October 2009 monetary policy review, the Reserve Bank of India directed all banks to raise their Provisioning Coverage Ratio to a minimum of 70 per cent by September 2010 to strengthen balance-sheet resilience after the global financial crisis.

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