New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Which of the following statements is TRUE regarding the

    RBI's Prompt Corrective Action (PCA) framework for Urban Cooperative Banks (UCBs) effective from April 1, 2025?
    A The PCA framework will apply to all UCBs irrespective of their deposit size. Correct Answer Incorrect Answer
    B The PCA framework will replace the Supervisory Action Framework (SAF) for UCBs with deposits above ₹100 crore. Correct Answer Incorrect Answer
    C Tier 1 UCBs with deposits up to ₹100 crore are included in the PCA framework. Correct Answer Incorrect Answer
    D The PCA invocation norms include a capital adequacy ratio (CAR) up to 350 bps below the required CAR. Correct Answer Incorrect Answer
    E The revised framework maintains the hard-coded ₹25,000 limit on capital expenditure restrictions. Correct Answer Incorrect Answer

    Solution

    Statement A is incorrect because the PCA framework will apply only to UCBs with deposits above ₹100 crore. Statement B is correct as the PCA framework will replace the Supervisory Action Framework (SAF) for UCBs with deposits above ₹100 crore. Statement C is incorrect because Tier 1 UCBs with deposits up to ₹100 crore are excluded from the PCA framework but will continue to be under enhanced monitoring. Statement D is incorrect because the PCA invocation norms include a capital adequacy ratio (CAR) up to 250 bps below the required CAR, not 350 bps. Statement E is incorrect because the revised framework removes the hard-coded ₹25,000 limit on capital expenditure restrictions, allowing Supervisors to set limits based on individual assessments. Therefore, the correct statement is B, making it the correct answer for this question.

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