7. Once the Prompt Corrective Action (PCA) Framework is invoked, what is/are the possible outcomes?
- Based on the risk threshold, the RBI may prescribe mandatory corrective actions such as restriction on dividend distribution/remittance of profits, requiring promoters /shareholders to infuse equity and reducing leverage.
- The RBI can also restrict the issuance of guarantees or take other contingent liabilities on behalf of group companies.
- Further, the central bank may also restrict branch expansion, impose curbs on capital expenditure other than for technological up-gradation within board-approved limits and restrict/ directly reduce variable operating costs.
Which of the statement(s) given above is/are correct?