Q. Consider the following statements with reference to the Prompt Corrective Action (PCA) framework:
1.The PCA framework is a set of guidelines that enable the RBI to provide financial assistance to NBFCs that are facing financial difficulties.
2.The PCA framework aims to dilute the effectiveness of the financial sector by identifying potential problem areas and taking proactive measures.
Select the correct answer from the codes given below:
Answer: D
Notes:
Explanation –
Statements 1 and 2 are incorrect. The PCA framework is actually a set of guidelines that enable the RBI to intervene in NBFCs that are showing signs of financial stress. The PCA framework is intended to strengthen the financial sector by identifying and addressing potential problems early.
Source: ForumIAS
