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Compare coverage across two bank reporting periods
Interpret asset quality and provisions · Fictional case
The situation
Gross impaired loans rise from ₹80 crore to ₹100 crore. Related provisions rise from ₹48 crore to ₹65 crore. Use a simplified ratio and ignore write-offs.
Your task
How do coverage and uncovered exposure move?
Reveal step-by-step solution
Set up the problem
Coverage moves from ₹48 ÷ ₹80 = 60% to ₹65 ÷ ₹100 = 65%.
Work through the numbers
Uncovered amounts are ₹32 crore and ₹35 crore respectively.
Interpret the result
Coverage improves by 5 percentage points while uncovered exposure rises by ₹3 crore. Examine migrations, recoveries and collateral.
What to remember
Compare the ratio and the currency exposure together. Match the provision and impaired loan definitions.