Prompt Corrective Action (PCA)

  • It is a framework under which banks with weak financial metrics are put under watch by the RBI.
  • It was initiated by the RBI in 2002 to discipline banks when they report poor and risky financial performance.
  • The PCA framework deems banks as risky if they slip below certain norms on three parameters — capital ratios, asset quality and profitability.
  • PCA is intended to help alert the regulator as well as investors and depositors if a bank is heading for ....
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