RBI issued revised PCA framework for banks which will be effective from Jan 1st

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Team Studycafe | Nov 3, 2021 | Views 126370

RBI issued revised PCA framework for banks which will be effective from Jan 1st

RBI issued revised PCA framework for banks which will be effective from Jan 1st

The Reserve Bank of India (RBI) has reviewed and revised the existing Prompt Corrective Action [PCA] framework for Scheduled Commercial Banks (SCBs), and the changes will be effective from 1 Jan, 2022.

The redesigned approach would focus on capital, asset quality, and leverage, according to the banking regulator.

The goal of the PCA framework, according to the central bank, is to allow supervisory involvement at the appropriate time and to oblige the supervised firm to initiate and implement remedial measures in a timely way in order to restore its financial health.

In addition to the corrective actions mandated, the RBI highlighted that the PCA framework does not restrict the central bank from taking any further action it deems appropriate at any time.

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