Question

    Which of the following statements about Prompt Corrective Action is/are True?

    I-                    Prompt Corrective Action Framework refers to the central bank’s watchlist of weak banks.

    II-                  The regulator can impose restrictions only after seeking approval from FSDC.

    III-                The PCA Framework applies only to commercial banks and does not cover all types of cooperative banks and non-banking financial companies.

    A Only I Correct Answer Incorrect Answer
    B Only II Correct Answer Incorrect Answer
    C I & II Correct Answer Incorrect Answer
    D I & III Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Prompt Corrective Action Framework refers to the central bank’s watchlist of weak banks. The regulator imposes restrictions like curbs on lending on such banks. The PCA Framework applies only to commercial banks and does not cover cooperative banks and non-banking financial companies.

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