RBI1 min read
Prompt Corrective Action
An RBI framework to restore the financial health of weak banks by imposing restrictions on dividend distribution, branch expansion, and management compensation when banks breach threshold levels of NPA, CAR, or leverage ratio.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Prompt Corrective Action in Indian corporate law?▼
An RBI framework to restore the financial health of weak banks by imposing restrictions on dividend distribution, branch expansion, and management compensation when banks breach threshold levels of NPA, CAR, or leverage ratio.
Q2. Why is Prompt Corrective Action important for compliance?▼
Prompt Corrective Action is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Prompt Corrective Action?▼
Prompt Corrective Action is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.
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