April 13, 2017 / 11:42 AM / 3 months ago

BRIEF-India cenbank announces revised prompt corrective action framework for banks

2 Min Read

April 13 (Reuters) - Reserve Bank of India:

* Revised prompt corrective action (PCA) framework for banks

* Provisions of the revised PCA framework will be effective from April 1, 2017

* Framework would be reviewed after three years

* Indicators to be tracked for capital, asset quality, profitability to be CRAR/ common equity tier I ratio , net NPA ratio & return on assets respectively

* PCA framework does not preclude RBI from taking any other action as it deems fit in addition to corrective actions prescribed in the framework

* Breach of any risk threshold would result in invocation of PCA

* A bank will be placed under PCA framework based on the audited annual financial results and the supervisory assessment made by RBI

* Leverage would be monitored additionally as part of the PCA framework

* RBI may impose PCA on any bank during the course of a year (including migration from one threshold to another) in case the circumstances so warrant

* Framework to apply to all banks in india including foreign banks operating via branches based on breach of risk thresholds of identified indicators Source text: bit.ly/2o91Gbb

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