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Question

Which of the following Statements is/are True?

I- PCA is a framework under which banks with weak financial metrics are put under watch by the RBI.

II- The RBI introduced the PCA framework in 2002.                         

III- It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector.

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

Solution

PCA is a framework under which banks with weak financial metrics are put under watch by the RBI. The RBI introduced the PCA framework in 2002 as a structured early-intervention mechanism for banks that become undercapitalised due to poor asset quality, or vulnerable due to loss of profitability. It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector.

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