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The formula for non-performing ratio (NPR) is the total amount of non-performing loans divided by the total amount of loans. It is used to measure the percentage of loans in a financial institution that are not being repaid as agreed. High NPR values may indicate a higher risk of financial instability for the institution.

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1y ago

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Define non performing assets coverage ratio?

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The provision expense ratio is calculated by dividing the provision for loan losses by the average total loans outstanding during a specific period. The formula is: Provision Expense Ratio = (Provision for Loan Losses / Average Total Loans) x 100.


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The provision coverage ratio is calculated by dividing the total provisions for bad debts by the total non-performing assets (NPAs). The formula is: Provision Coverage Ratio = (Total Provisions / Total NPAs) x 100. This ratio indicates the extent to which a bank's provisions cover its bad loans, reflecting its ability to absorb potential losses. A higher ratio suggests better financial health and risk management.


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