On 15th December, 2021, the RBI introduced a prompt corrective action (PCA) framework for large non-banking financial companies (NBFCs). It aims to nurse those with rickety balance sheets back to health.
The PCA framework for NBFCs will come into effect from October 1, 2022, based on the financial position of NBFCs on or after March 31, 2022.
Need
IL&FS, DHFL, SREI and Reliance Capital, big four financial firms collapsed in the last three years despite the tight monitoring in the financial sector. They collectively owe over Rs. 1 lakh crore to investors.
Applicability
All deposit-taking non-banking financial companies (NBFCs)
