PCA

Five-judge Constitution bench lists terms for cases related to Prevention of Corruption Act

The RBI removed public sector lender from the Prompt Corrective Action Framework on complying with parameters like net non-performing assets and capital ratios

Central Bank of India has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis, says RBI

The banks' lobby group has been asked to assist with the preparation of the viability plan for RRBs

Bad loans in some NBFCs will definitely rise but no one should complain. They are no longer shadow banks

According to RBI data for January 2021, while there were 9,507 NBFCs, only 64 were deposit-taking (NBFC-D)

Three different risk thresholds, three different yardsticks to measure PCA risk thresholds. The curns against the NBFC get progressively tightened as they breach higher threshold levels

The PCA being extended to NBFCs may prove to be a good decision for the long-term as it will encourage good practises and is also expected to improve governance

New regulations for stressed NBFCs harmonise with those for banks

There are about 10,000 NBFCs registered with the RBI, but only a few that can potentially face these PCA restrictions

PCA will be activated for large NBFCs once their capital adequacy falls by 300 bps, or net NPA ratio rises above 6%

IDBI Bank, which came out of PCA last week, says processes have been strengthened and past mistakes will not be repeated

IDBI Bank's exit from the PCA framework eases the rules for lender to expand its business

Says the country is seeing rural economy coming back, is confident urban and metro economy will also grow

Currently, Indian Overseas Bank (IOB), Central Bank of India, UCO Bank and United Bank of India are under this framework

The bank is expected to come out of the Reserve Bank of India's prompt corrective action (PCA) framework by March 2020

The PCA norms trigger if a bank's net NPA crosses 6 per cent or if CRAR (capital to risk weighted assets) is below the regulatory requirement of 10.88 per cent as of March 2019.

The state of affairs in the banks had less to do with procyclicality and more to do with politically induced reckless lending to dodgy borrowers.

Das explained placing a lender under PCA framework is normal with lot of precedents

Lender inserts ads in several newspapers, issues public notice to explain its point on the FIR that was filed against it based on a complaint by Religare Finvest