BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In a bid to check loan defaults, RBI stated that a PCR will be set up containing information on all borrowers to ensure financial stability. What is the full form of PCR?

A	Public Credit Review
B	Public Customer Registry
C	Public Credit Registry
D	People Credit Registry

Explanation:

Detailed explanation-1: -The Y.M. Deosthalee committee, 2018 set up by the Reserve Bank of India (RBI) recommended the setting up of a PCR. Consequently, the RBI announced plans to establish a PCR as an independent unit within the RBI.

Detailed explanation-2: -Provision coverage ratio (PCR), on the other hand, refers to the percentage of funds created against NPAs. A higher PCR ratio reflects that the bank has sufficient capital to withstand asset quality pressures and will not need significant incremental capital in case of extreme stress.

Detailed explanation-3: -The Reserve Bank released the 26th issue of the Financial Stability Report (FSR) on the 29th of December 2022. The report indicates the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of the financial system.

Detailed explanation-4: -Lender of Last Resort As a Banker to Banks, the Reserve Bank also acts as the ‘lender of the last resort’. It can come to the rescue of a bank that is solvent but faces temporary liquidity problems by supplying it with much needed liquidity when no one else is willing to extend credit to that bank.

There is 1 question to complete.