India’s bank Provision Coverage Ratio (PCR) — how big is the cushion against bad loans?
Quick answerThe
Provision Coverage Ratio (PCR) is the share of a bank’s bad loans it has already set money aside against — the cushion that absorbs loan losses. Indian banks now carry a PCR of about
76-77%, covering roughly
three-quarters of gross NPAs, a
multi-year high after years of bad-loan clean-up. The average hides a split:
public-sector banks ~83-84% versus
private banks ~76-77%. A high PCR means most of the pain on existing
bad loans has already been taken through profits, protecting
capital. Figures are official, rounded, approximate and revised periodically.
The chart shows the Provision Coverage Ratio (%) for the banking system and for the public- and private-sector bank groups. The table below carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.
Provision Coverage Ratio by fiscal year and bank group (%)
| Fiscal year | System PCR | Public PCR | Private PCR | Note |
| FY21 | ~68% | ~78% | ~67% | Buffers rebuilt as the NPA clean-up matures |
| FY22 | ~71% | ~80% | ~72% | Provisioning cover keeps climbing as slippages fall |
| FY23 | ~74% | ~82% | ~74% | Cushion against bad loans near a multi-year high |
| FY24 | ~76% | ~83% | ~76% | PCR around three-quarters of gross NPAs |
| FY25 | ~77% | ~84% | ~77% | Provisioning cover holds near cycle highs |
Metric: PCR = provisions held against NPAs / gross NPAs, at the scheduled-commercial-bank system level with an illustrative public- vs private-sector split. All figures are rounded and approximate; recent years are provisional and revised, PCR is sometimes quoted including technical write-offs (which raises it), and individual banks vary widely. For exact latest figures see the sources linked below.
What it means for bankers
The Provision Coverage Ratio is the bank’s shock-absorber against its own bad loans. When a loan turns into a non-performing asset, a bank must set aside provisions against the expected loss; PCR tells you how much of that expected loss has already been recognised. A bank with a high PCR has effectively pre-paid most of the damage, so when bad loans are finally written off there is little further hit to profit or capital. The rise in Indian banks’ PCR — from around two-thirds of gross NPAs early in the clean-up to roughly three-quarters now — is the quiet legacy of the asset-quality review and the years of heavy provisioning that followed. Public-sector banks, which carried the worst of the bad-loan stock, now run the highest PCR of all, around 83-84%, which is a major reason the system looks far safer than it did a decade ago. For a banker or analyst, PCR is read alongside the gross and net NPA ratios: a falling NPA ratio with a rising PCR is the strongest possible signal that a loan book has genuinely healed rather than merely been re-labelled.
India bank PCR FAQ
What is the Provision Coverage Ratio (PCR)?
PCR is the share of a bank's gross non-performing assets (bad loans) that it has already set aside money against. With 100 rupees of gross NPAs and 76 rupees provided, PCR is 76%. A higher PCR is a thicker cushion -- the bank has already absorbed most of the expected loss, so future write-offs hit profit and capital less. It is one of the clearest signals of how conservatively a bank has cleaned up its book.
What is the Provision Coverage Ratio of Indian banks?
At the system level Indian scheduled commercial banks carry a PCR of roughly 76-77% -- provisions covering about three-quarters of gross NPAs, a multi-year high. The average hides a gap: public-sector banks run a higher PCR of ~83-84% while private banks are nearer ~76-77%. Figures are rounded and approximate.
Why has Indian banks' PCR risen so much?
Through the late-2010s bad-loan crisis the RBI pushed banks to recognise NPAs honestly and provide heavily against them. As provisions built faster than fresh slippages, and old bad loans were written off or recovered, the share of NPAs already covered climbed from around two-thirds early in the clean-up to roughly three-quarters now. A high PCR means most of the pain on the existing bad-loan stock has already been taken through the P&L.
How is PCR calculated here?
PCR as provisions held against NPAs divided by gross NPAs, at the system level with an illustrative public/private split, by fiscal year, compiled from RBI's Financial Stability Report and Report on Trend & Progress of Banking. Figures are rounded and approximate; PCR is sometimes quoted with technical write-offs included, which raises the number, so treat these as direction and rough magnitude, not a precise single-bank figure.
Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable PCR JSON feed.
Source: RBI — Financial Stability Report and Report on Trend & Progress of Banking in India,
rbi.org.in. PCR is provisions held against NPAs / gross NPAs; figures are rounded and approximate, recent years are provisional and revised, and PCR is sometimes quoted including technical write-offs. We never reproduce source text verbatim. Reviewed by
Vikram Jain. Last updated 19 Jun 2026, 05:39 IST.