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MCQs 2026

171.
The PCA framework applies to which type of financial institutions regulated by the RBI?
A Non-Banking Financial Companies (NBFCs) only.
B Co-operative Banks only.
C Scheduled Commercial Banks (SCBs).
D All financial institutions regulated by the RBI.
172.
What is the ultimate goal of this proactive regulatory stance by the RBI?
A To reduce the number of banks.
B To maintain public trust and ensure the soundness of the financial sector.
C To encourage risk-taking by banks.
D To simplify the banking business.
173.
The revised PCA framework introduces more stringent triggers and a wider range of:
A Incentives for growth.
B Corrective actions.
C Regulatory exemptions.
D Reporting waivers.
174.
Which of the following is a corrective measure banks might be compelled to take under PCA?
A Reducing capital requirements.
B Improving asset quality and strengthening governance.
C Increasing dividend payouts.
D Expanding management compensation.
175.
The objective of the PCA framework is to compel banks to undertake timely corrective measures to prevent:
A Excessive profitability.
B Systemic risks arising from financial weaknesses.
C Rapid expansion of services.
D Increased competition.
176.
What is emphasized for banks under the revised PCA regime?
A Reduced supervisory engagement.
B A more intrusive approach and enhanced supervisory engagement.
C Complete autonomy in decision-making.
D Limited reporting to the RBI.
177.
What kind of restrictions can the RBI impose on banks breaching the new PCA thresholds?
A Increased dividend distribution.
B Expansion of branch networks.
C Stricter restrictions on dividend distribution, branch expansion, and management compensation.
D Reduced reporting requirements.
178.
Which of the following areas has seen the introduction of new risk thresholds in the revised PCA framework?
A Customer service satisfaction.
B Capital adequacy, asset quality, and profitability.
C Marketing strategies.
D Technological innovation.
179.
When does the revised PCA framework for banks become effective?
A January 1, 2026
B March 1, 2026
C April 1, 2026
D July 1, 2026
180.
What is the primary purpose of the RBI's Prompt Corrective Action (PCA) framework?
A To reward well-performing banks.
B To ensure proactive identification and addressing of banks with deteriorating financial health.
C To encourage aggressive lending practices.
D To reduce regulatory oversight on banks.