What does PCA stand for in the context of banking regulation?

"Prompt Corrective Action" "Preemptive Capital Assessment" "Periodic Credit Analysis" "Proactive Consolidation Agenda"

Which entity implements PCA on banks in India?

"Securities and Exchange Board of India (SEBI)" "Reserve Bank of India (RBI)" "Insurance Regulatory and Development Authority of India (IRDAI)" "Pension Fund Regulatory and Development Authority (PFRDA)"

What is the primary purpose of the PCA framework?

"To punish banks for poor performance" "To promote mergers and acquisitions in the banking sector" "To address financial weaknesses in banks before they escalate" "To encourage banks to invest in new technologies"

Which of the following is NOT a factor considered by RBI when deciding whether to place a bank under PCA?

"Profitability" "Asset Quality" "Market Share" "Debt Level"

What does CRAR stand for in banking terminology?

"Credit Risk Assessment Ratio" "Capital Reserve Allocation Ratio" "Core Revenue Adjustment Rate" "Capital Adequacy Ratio"

What does a high CRAR indicate about a bank's financial health?

"The bank has a strong capital buffer to absorb potential losses" "The bank has a high level of non-performing assets" "The bank is highly profitable" "The bank has a low debt level"

What metric does RBI primarily use to assess a bank's profitability under the PCA framework?

"Net Interest Margin (NIM)" "Return on Equity (ROE)" "Return on Assets (ROA)" "Earnings Per Share (EPS)"

What type of restrictions does RBI impose on banks under PCA?

"Mandatory only" "Discretionary only" "Both mandatory and discretionary" "No restrictions are imposed"

Which of the following actions might RBI take as part of its discretionary measures under PCA?

"Force the bank to close down immediately" "Prohibit the bank from lending any further funds" "Require the bank to reassess its business model and strategy" "Nationalize the bank without any compensation to shareholders"

What is the potential benefit of PCA for depositors of a bank?

"PCA guarantees that depositors will not lose any money" "PCA can help improve the long-term stability and health of the bank" "PCA allows depositors to withdraw their funds without any restrictions" "PCA ensures that the bank will continue to pay high interest rates on deposits"