PCA Framework for Urban Co-operative Banks (UCBs)

Starting April 1, 2025, around 500 Primary Urban Co-operative Banks (UCBs) will transition to the Prompt Corrective Action (PCA) Framework under the Reserve Bank of India's (RBI) supervisory framework.

 

Must Read: What is Prompt Corrective Action (PCA)?

 

About the PCA Framework:

1. Introduced by RBI: Initially implemented for Scheduled Commercial Banks in 2002, the PCA framework was extended to UCBs in July 2024, replacing the Supervisory Action Framework (SAF).
2. Objective: Ensures timely supervisory intervention, requiring UCBs to take corrective actions to restore financial stability.
3. Applicability: Covers all Tier 2, Tier 3, and Tier 4 UCBs.
4. Key Monitoring Areas: Focuses on Capital, Asset Quality, and Profitability to maintain financial discipline.

 

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