What is coverage ratio for banks?
Key Takeaways A coverage ratio, broadly, is a measure of a company’s ability to service its debt and meet its financial obligations. The higher the coverage ratio, the easier it should be to make interest payments on its debt or pay dividends.
How do banks calculate liquidity coverage ratio?
The LCR is calculated by dividing a bank’s high-quality liquid assets by its total net cash flows, over a 30-day stress period.
How are bank ratios calculated?
To calculate the efficiency ratio, divide a bank’s expenses by net revenues. The value of the net revenue is found by subtracting a bank’s loan loss provision from its operating income. A lower efficiency ratio is preferable: it indicates that a bank is spending less to generate every dollar of income.
What is provision coverage ratio formula?
Provision Coverage Ratio (PCR) = Provisions/Gross NPA A PCR of 70% or more tells us that the bank is not at risk and the asset quality is taken care of. Also, the bank will be strong enough to withstand NPAs.
What does PCR stand for in banking?
Public Credit Registry (PCR), created by the Reserve Bank of India, is a public digital registry to capture and store financial information of borrowers in India, both existing and new borrowers.
What is Ilaap in banking?
Two important processes are central to making banks more resilient and avoiding adverse situations: the internal capital adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP).
How is bank liquidity risk calculated?
To measure the magnitude of liquidity risk the following ratios are used: 1. Ratio of Core Deposit to Total Assets (CD/TA) 2. Ratio of Total Loans to Total Deposits (TL/TD) 3. Ratio of Time Deposit to Total Deposits (TMD/TD) 4.
How do you calculate the efficiency of a bank?
The efficiency ratio is calculated by dividing the bank’s noninterest expenses by their net income. Banks strive for lower e fficiency ratios since a lower e fficiency ratio indicates that the bank is earning more than it is spending. A general rule of thumb is that 50% is the maximum optimal e fficiency ratio.
What is the full form of PCA in banking?
prompt corrective action
The Reserve Bank has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) Framework, in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), for initiation of certain structured and discretionary …
How do I check my PCR results?
You may find your PCR (Polymerase Chain Reaction)/ ART (Antigen Rapid Test) test results in HealthHub. Click on Health eServices and login via SingPass. The test results will usually be available within one to two days of your swab test.
What is Ilaap and Icaap?