  Thirdly, in 2009, observing the trend in profits being made by banks, the Provisioning Coverage Ratio (PCR) requirement for banks was introduced to address apprehensions about asset quality due to exuberant lending during the boom phase. Banks were required to build up a PCR of 70% of gross NPAs by September 2010.
PCR was intended to be an interim measure and it was hoped that it would be replaced by a forward-looking counter-cyclical provisioning methodology being developed by the Basel Committee on Banking Supervision (BCBS) and IASB. Since this is taking time, RBI is working on a methodology similar to Spanish dynamic provisioning framework as an interim measure. 19.