RBI introduced the PCA framework to improve the financial conditions of UCBs

RBI introduced the PCA framework to improve the financial conditions of UCBs.
For weak urban cooperative banks (UCBs), the Reserve Bank of India (RBI) has approved a Prompt Corrective Action (PCA) framework.
This Prompt Corrective Action (PCA) framework will be applicable to urban co-operative banks (UCBs), with deposits above ₹100 crore.
Under the PCA framework, a financially unsound and ill-managed UCB can be brought under this.
If a UCB breaches the risk thresholds related to capital and profitability, then it can be brought under the PCA.
Currently, there are 1500 UCBs in the country, which are categorized into four tiers.
The main objective of the PCA is to enable supervisory intervention at an appropriate time.
The provisions of the PCA Framework will be effective on April 1, 2025.