?The RBI on Tuesday issued a revised Prompt Corrective Action (PCA) framework for banks to enable supervisory intervention at “appropriate time” and also act as a tool for effective market discipline.

• The RBI has issued a revised Prompt Corrective Action (PCA) framework for banks to enable supervisory intervention at “appropriate time” and also act as a tool for effective market discipline.
• Capital, asset quality and leverage will be the key areas for monitoring in the revised framework. The revised PCA framework will be effective from January 1, 2022. The framework was last revised in April 2017.
• The objective of the PCA framework is to enable supervisory intervention at an appropriate time and require the supervised entity to initiate and implement remedial measures in a timely manner, so as to restore its financial health.
• The central bank also stressed that the PCA framework does not preclude the RBI from taking any other action as it deems fit at any time, in addition to the corrective actions prescibed.