Q. Which condition does not trigger RBI's Prompt Corrective Action (PCA) for banks?
Answer: High Leverage Ratio
Notes: The RBI's PCA framework mandates intervention if a bank records net NPA above 6%, capital adequacy ratio below 9%, or negative return on assets for four years. PCA restrictions include halting dividend payments and branch expansion. A leverage ratio above 25 times Tier 1 capital also triggers PCA. Leverage ratio measures a bank’s core capital relative to its total assets and exposure.