Banking Regulation: PCA Framework and MSME Classification

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📖 Quick summary

RBI's PCA framework restricts weak banks based on capital adequacy, NPAs and return on assets — a corrective, not punitive, tool. The 2020 MSME classification revision uses combined investment + turnover criteria, unified across manufacturing and services.

This national-framework topic is identical for TSPSC as it is for UPSC — for the full deep-dive with all the detail, follow the link above.

💡 Key Facts

PCA triggers: capital adequacy, net NPAs, return on assets.
2020 MSME criteria: investment + turnover (unified for manufacturing/services).

🔖 60-Second Revision

PCA = early intervention for weak banks; MSME (2020) = higher thresholds, easier to retain status while growing.

Banking Regulation: PCA Framework and MSME Classification — PDF & Extra Materials

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