CURRENT AFFAIRS

Detailed explanation-1: -The provisions of the revised PCA Framework will be effective from January 1, 2022.

Detailed explanation-2: -PCA is a framework under which banks with weak financial metrics are put under watch by the RBI. The RBI introduced the PCA framework in 2002 as a structured early-intervention mechanism for banks that become undercapitalised due to poor asset quality, or vulnerable due to loss of profitability.

Detailed explanation-3: -RBI had placed 11 state-run banks – Allahabad Bank, United Bank, Corporation Bank, IDBI Bank, Uco Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra – under PCA framework after they breached the risk thresholds.

Detailed explanation-4: -RBI takes state-owned lender Central Bank of India out of PCA framework.

Detailed explanation-5: -History of Prompt Corrective Action The Reserve Bank of India (RBI) introduced the PCA framework in 2002.