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Prompt Corrective Action

Prompt Corrective Action is a system of RBI under which it can initiate a corrective action in case of a bank which is found to be having low capital adequacy or high Non-performing Assets. These are called Trigger Points. RBI takes such action when Capital Adequacy Ratio goes down to less than 9% and Non-Performing Assets go up to more than 10%. Further, if return on assets us below 0.25%; this also serves as a trigger point to Prompt Corrective Action.

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