The Prompt Corrective Action (PCA) framework is a system that the Reserve Bank India imposes on banks with poor financial performance. RBI introduced the PCA framework in 2002. The PCA Framework for Non-Banking Financial Company came into effect in which of the following year?

Question

Question

This question was previously asked in

SIDBI Grade A Memory Based Test (Held on: 28 January 2023)

Answer 1

The correct answer is 2022.

Key Points

The PCA Framework for Non-Banking Financial Companies came into effect in 2022.
The Reserve Bank of India has introduced the prompt corrective action framework for non-banking financial companies (NBFCs).
Its goal is to address the issue of non-performing assets in India's banking system.
Based on the recommendations of the Financial Stability and Development Council's working group on Resolution Regimes for Financial Institutions in India and the Financial Sector Legislative Reforms Commission, the framework was reviewed in 2017.
The Capital Adequacy Ratio, known as the capital-to-risk-weighted-assets ratio, is used to protect depositors and promote financial system stability and efficiency around the world.