Economics • Banking & FinanceMedium
In the context of Indian banking regulations, what does the term 'Prompt Corrective Action (PCA)' framework NOT monitor as a core indicator?
A. Capital to Risk-Weighted Assets Ratio (CRAR)
B. Net Non-Performing Assets (NPAs)
C. Return on Assets (RoA) or Leverage ratio
D. Total volume of retail credit card issuance✓ Correct Answer
💡 Solution & Explanation
The Reserve Bank of India administers the Prompt Corrective Action framework by monitoring core financial parameters such as capital adequacy, asset quality, and profitability rather than specific retail credit card volumes. Distractor choices correctly represent regulated capital ratios and non-performing asset thresholds that trigger supervisory interventions. Commercial banks placed under PCA face operational restrictions on expansion and lending.
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