Consider the following statements about Prompt Corrective Action PCA Framework and choose the correc...........

Economic Affairs Types of Banks and Banking

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Consider the following statements about Prompt Corrective Action (PCA) Framework and choose the correct one/s

1. It was introduced by the Reserve Bank of India

2. extends to all the commercial and regional rural banks (RRBs) functioning in India.

code:

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

1 only

It was introduced by the Reserve Bank of India: This statement is correct. The Prompt Corrective Action (PCA) framework was introduced by the Reserve Bank of India to maintain the sound financial health of banks and ensure that they take timely corrective measures when their financial health deteriorates.

It extends to all the commercial and regional rural banks (RRBs) functioning in India: This statement is incorrect. The PCA framework applies primarily to commercial banks and not regional rural banks (RRBs). The framework is designed to address the financial health of commercial banks to prevent further deterioration and protect the interests of depositors and the banking system.