BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Prompt Corrective Area
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Prompt Corrective Action
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Prompt Concern Action
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Prompt Common Action
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Detailed explanation-1: -Another significant step has been taken by the Reserve Bank of India in parallel which has been somewhat under-appreciated, viz., the imposition of Prompt Corrective Action (PCA) on a number of banks whose capital, asset quality and/or profitability do not meet pre-specified thresholds.
Detailed explanation-2: -The objective of the PCA Framework is to enable Supervisory intervention at appropriate time and require the Supervised Entity to initiate and implement remedial measures in a timely manner, so as to restore its financial health. The PCA Framework is also intended to act as a tool for effective market discipline.
Detailed explanation-3: -The Reserve Bank of India (RBI) on Tuesday removed Central Bank of India from its Prompt Corrective Action Framework (PCAF) after the lender showed improvement in various financial ratios, including minimum regulatory capital and net non-performing assets (NNPAs).
Detailed explanation-4: -The PCA framework is applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs.