Q. Regarding the Prompt Corrective Action (PCA) framework for urban co-operative banks, consider the following statements:

1. The PCA framework was first introduced in 2012 for urban co-operative banks.
2. Under PCA, banks are required to raise capital when their net NPA exceeds 6%.
3. The PCA framework is similar to the framework used for scheduled commercial banks.

How many of the above statements are correct?
Answer: All three
Notes:

• The PCA framework was first introduced in 2012 for urban co-operative banks: This is correct. The PCA framework is indeed a continuation and expansion of measures initiated in 2012.
• Under PCA, banks are required to raise capital when their net NPA exceeds 6%: This is correct. RBI mandates capital raising under such conditions to ensure financial stability.
• The PCA framework is similar to the framework used for scheduled commercial banks: This is correct. The PCA framework for UCBs mirrors that of SCBs in terms of monitoring and intervention.

Thus, all the statements are correct. The correct answer is (c) All three.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.