RBI issues prompt corrective action framework for urban cooperative banks

The RBI on Friday issued a prompt corrective action framework for urban cooperative banks with an aim to enabling supervisory intervention at an appropriate time.
The provisions of the Prompt Corrective Action (PCA) Framework for Primary (Urban) Co-operative Banks (UCBs) will be effective from April 1, 2025.
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 in a timely manner, to restore their financial health.
The Reserve Bank had issued a Supervisory Action Framework (SAF) as an early intervention tool for bringing about desired improvements in weak UCBs and UCBs which are experiencing financial stress. The SAF was last revised in January 2020.
“This PCA framework shall replace the SAF,” the RBI said in a statement.
The revised framework seeks to provide flexibility to design entity specific supervisory action plans based on the assessment of risks on a case-by-case …