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Q » Explain provisioning in banking.
06 Dec, 2025
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A » In banking, provisioning refers to the process of setting aside funds to cover potential loan losses. This financial safeguard ensures banks maintain sufficient reserves to absorb potential defaults, thereby protecting their financial stability. Provisioning helps mitigate risks associated with non-performing assets and is a crucial aspect of prudent financial management, illustrating a bank's preparedness for adverse economic conditions and its commitment to maintaining customer confidence and regulatory compliance.
06 Dec, 2025
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