• PREETA SINHA

Abstract: The Banking industry in India is going through a substantial transformation from 2016 onwards with the implementation of Insolvency and Bankruptcy code (IBC) and the introduction of improved Prompt corrective action (PCA) framework by RBI. In 2018, 11 Public sector Banks were put under PCA framework through which RBI has put restrictions on dividend distribution, Branch Expansion and Management compensation. The trigger points which reflects the financial conditions of the banks are CAR, Net NPA and Return on Assets. Capital adequacy ratio (CAR) of scheduled commercial banks is 13.5% which is lower than the global average of 14%.The risk factors which comprises of CAR influences the financial performances of the banks. The study is an attempt to determine the most influencing risk determinants responsible for the deteriorating CRAR in the banks under PCA. Quarterly data over the period 2014-2018 (Dec) has been taken to analyze the relationship between Credit Risk, Market Risk and Operational Risk on Capital Adequacy ratio. The financial reports of the banks under PCA were taken for data collection from the respective banks site.

Keywords: Capital adequacy ratio, Market risk, Operational risk, Credit Risk

"The Effect of Risk Factors on the Capital Adequacy Ratio of Banks under the PCA framework", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 4, page no.548-552, April-2019, Available :http://www.jetir.org/papers/JETIR1904176.pdf

"The Effect of Risk Factors on the Capital Adequacy Ratio of Banks under the PCA framework", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 4, page no. pp548-552, April-2019, Available at : http://www.jetir.org/papers/JETIR1904176.pdf