Under the Prompt Corrective Action (PCA) framework for Non-Banking Financial Companies (NBFCs), which of the following indicators are monitored?

💡 Solution & Explanation

The Prompt Corrective Action framework for Non-Banking Financial Companies uses Capital to Risk-Weighted Assets Ratio and Net Non-Performing Assets as core threshold metrics to initiate regulatory interventions and corrective supervisory actions. Other macroeconomic indicators such as consumer price inflation and the index of industrial production are broad national statistics used by the Monetary Policy Committee rather than entity-specific health measures. The Reserve Bank of India regulates non-banking financial companies under Chapter III B of the Reserve Bank of India Act of 1934.