The Reserve Bank of India (RBI) on June 26, 2024, issued a notification regarding the Prompt Corrective Action (PCA) Framework for Primary (Urban) Co-operative Banks (UCBs).
The following has been stated-
•The existing Supervisory Action Framework (SAF) for UCBs has since been reviewed. Accordingly, the revised framework replacing the SAF, under the nomenclature Prompt Corrective Action (PCA) Framework is contained in attached to the document.
•The PCA Framework shall apply to all UCBs under Tier 2, Tier 3 and Tier 4 categories except UCBs under All Inclusive Directions. Tier 1 UCBs, though not covered under the PCA Framework as of now, shall be subject to enhanced monitoring under the extant supervisory framework. The exemption of Tier 1 UCBs from the PCA Framework shall be reviewed in due course.
•The objective of the PCA Framework is to enable supervisory intervention at an appropriate time and require the UCBs to initiate and implement remedial measures on time, to restore their financial health. The PCA Framework does not preclude RBI from taking any other action as it deems fit at any time, in addition to the corrective actions prescribed in the Framework.
•The provisions of the PCA Framework will be effective from April 1, 2025.
•UCBs which are currently subject to supervisory actions based on will continue to be governed by the restrictions imposed on them. Such UCBs will be considered for an exit from SAF or to be placed under PCA on a case-by-case basis by the Reserve Bank of India.
•A copy of this circular should be placed before the Board of Directors of your bank in its next meeting and a confirmation thereof should be sent to the office of the Senior Supervisory Manager concerned.
•With effect from April 1, 2025, instructions contained in this circular shall supersede all earlier instructions issued on SAF.
[Notification No. RBI/2024-25/55 DOS.CO.PPG.SEC.No.8/11.01.005/2024-25]
