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Generate QuizThe RBI's regulatory framework for identifying and supervising weak banks is commonly known as the ___ framework.
- first
- PCA (or Prompt Corrective Action)
- 40
- Green
Answer: PCA (or Prompt Corrective Action)
The Prompt Corrective Action (PCA) framework is triggered when banks breach certain regulatory thresholds like high NPAs, low capital adequacy, or negative return on assets. It imposes mandatory and non-mandatory restrictions on the bank to restore its financial health.