PCA framework helped reduce contagion losses: Central bank report

The RBI has placed 11 state-run banks under the prompt corrective action (PCA) framework.

Lending and other restrictions imposed on 11 banks under the prompt corrective action (PCA) framework has helped in reducing contagion losses on the banking system in case these lenders fail, according to a Reserve Bank of India (RBI) report.

The RBI has placed 11 state-run banks under the PCA framework. "Lending and other restrictions imposed on PCA banks under the PCA framework have led to a reduced impact on the system through connectivity. This has reduced the contagion losses incurred by the banking system in case of PCA banks failure," RBI said in its Financial Stability Report released Monday.

The findings were