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In this example, the credit union should target a Net Worth between 8.40% and 10.00%. If the credit union has Net Worth of 10% and every high risk occurs, Net Worth would be 7%.
Established by the Banking Act of 1933 at the depth of the most severe banking crisis in the nations history, its immediate contribution was the restoration of public confidence in banks.
PCA full form stands for Prompt Corrective Action. PCA is a system that the RBI imposes on banks showing signs of financial stress. The regulator considers banks as unsafe if they fail to meet the standards on certain financial metrics or parameters. Read on to know about these parameters and the workings of PCA.
Broadly speaking, the FDIC pursues enforcement actions against the above entities for violations of laws, rules, or regulations, unsafe or unsound banking practices, bdocHubes of fiduciary duty, and violations of final orders, conditions imposed in writing or written agreements.
Section 38 of the Federal Deposit Insurance (FDI) Act, 12 U.S.C. 1831o, Prompt Corrective Action (PCA), restricts or prohibits certain activities for all insured depository institutions (IDIs) and establishes a framework of supervisory actions for IDIs that are not Adequately Capitalized.
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Pursuant to the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991, the FDIC Board of Directors approved the prompt corrective action rule on September 15, 1992. On December 19, 1992, the prompt corrective action rule took effect.
A few leading banks which are being regulated under the PCA guidelines currently are the Indian Overseas Bank (IOB), United Bank of India, and Central Bank of India.

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