MasteryExams
Economics • Banking & FinanceMedium

Under the Prompt Corrective Action (PCA) framework of the RBI, which parameter is NOT typically monitored as a core indicator?

A. Capital to Risk-Weighted Assets Ratio (CRAR)
B. Net Non-Performing Assets (NPA) ratio
C. Return on Assets (RoA)
D. Total volume of retail credit card issuance✓ Correct Answer

💡 Solution & Explanation

The Prompt Corrective Action framework monitors essential financial health parameters including capital adequacy through the Capital to Risk-Weighted Assets Ratio, asset quality through net non-performing assets, and profitability through the return on assets. Retail credit card issuance volumes relate to general business growth rather than core solvency or reserve strength. This framework helps the central bank intervene early when commercial lenders show signs of financial stress.

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