RBI asks banks to increase bad loan provisions

Banks might be dropping their guard against bad loans. This is evident from the fact that the banking system’s provision coverage ratio (PCR) has dropped below 50 per cent, compared with as much as 70 per cent only two years ago. The bad loans, which have increased significantly, are eating into profits of Indian banks, especially the public-sector ones, leading to a sharp decline in their provision coverage ratio (PCR).

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