Page 51 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
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not intending to accept public funds; (ii) Net Worth/Aggregate Risk Weighted Assets,
Government Companies, (iii) Primary Dealers Leverage Ratio and NNPA. A NBFC will
and (iv) Housing Finance Companies] generally be placed under PCAF based on
the audited Annual Financial Results and/or
For NBFCs-D and NBFCs-ND, Capital and the Supervisory Assessment made by the RBI.
Asset Quality would be the key areas for
However, the RBI may impose PCA on any
monitoring in PCA Framework. For CICs, NBFC during the course of a year (including
Capital, Leverage and Asset Quality would migration from one threshold to another) in
be the key areas for monitoring in PCA case the circumstances so warrant.
Framework.
The Reserve Bank may issue a press release
For NBFCs-D and NBFCs-ND, indicators
when a NBFC is placed under PCA as well as
to be tracked would be Capital to Risk when PCA is withdrawn vis-à-vis a NBFC
Weighted Assets Ratio (CRAR), Tier I Capital
Ratio and Net NPA Ratio (NNPA). For CICs, Breach of any risk threshold (as detailed under)
indicators to be tracked would be Adjusted may result in invocation of PCA.

Indicator Risk Threshold-1 Risk Threshold-2 Risk Threshold-3

More than 300 bps but up to 600
Up to 300 bps below the regula- More than 600 bps below
bps below regulatory minimum
CRAR tory minimum CRAR [current- regulatory minimum CRAR
CRAR [currently, CRAR <12% but
ly, CRAR <15% but 12%] [currently, CRAR <9%]
9%]
Upto 200 bps below the regu- More than 200 bps but up to 400 More than 400 bps below the
Tier I
latory minimum Tier I Capital bps below the regulatory minimum regulatory minimum Tier I
Capital
Ratio [currently, Tier I Capital Tier I Capital Ratio [currently, Tier I Capital Ratio [currently, Tier I
Ratio
Ratio <10% but 8%] Capital Ratio <8% but 6%] Capital Ratio <6%]
NNPA Ratio
(including >6% but  9% >9% but 12% >12%
NPIs)

Indicator Risk Threshold-1 Risk Threshold-2 Risk Threshold-3

More than 1200 bps
Up to 600 bps below the More than 600 bps but up to
Adjusted Net Worth regulatory minimum ANW/ 1200bps below regulatory min- below regulatory
/ Aggregate Risk minimum ANW/RWA
RWA [currently, ANW/RWA imum ANW/RWA [currently,
Weighted Assets [currently, ANW/RWA
<30% but 24%] ANW/RWA <24% but 18%]
<18%]

The Institute Of Cost Accountants Of India

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