When does a bank fall under the PCA framework?
Aug 29, 05:08

The Reserve Bank of India can place a bank under the Prompt Corrective Action (PCA) category, based on the audited annual financial results of the lender and the central banker's continuous supervisory assessment. The RBI closely watches three parameters of the banks including capital-to-risk weighted assets ratio (CRAR), net non-performing assets (NPA) and return on assets (RoA). Banks under PCA have restrictions on dividend distribution, remittance of profits, and with branch expansion and capital expenditure. Currently, Central Bank of India is the only bank under the PCA framework.

When banks fall under PCA