RBI Introduces PCA Framework for NBFCs

On 15th December, 2021, the RBI introduced a prompt corrective action (PCA) framework for large non-banking financial companies (NBFCs).

  • It aims to nurse those with rickety balance sheets back to health.
  • The PCA framework for NBFCs will come into effect from October 1, 2022, based on the financial position of NBFCs on or after March 31, 2022.

Need

  • The RBI decision has come after four big finance firms — IL&FS, DHFL, SREI and Reliance Capital — which collected public funds through fixed deposits and non-convertible debentures collapsed in the last three years despite the tight monitoring in the financial sector. They ....
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