Equitas Small Finance Bank: A Profitable lender to small businesses

[Souresh_Pal]

As per Q3 concall they have 200 cr of provision against the total restructured book. This 200 cr is not considered while calculating PCR.
To understand how write off and provisions work see this. I explained it in HDFC Bank thread.

HDFC Bank- we understand your world

As per my limited knowledge, write off is done against balance sheet. Provisioning is done from Profit and loss statement. So there is a reserve of provision which gets money from pre provisioning operating profit . Then later when required Non performing loans are written off at the expense of that reserve/provision. If the loans are written off and there is not enough provision then it will eat into bank’s equity. That will reduce share price since banks are valued in terms of PB ratio and t…