The All India RRB Officers' Federation has warned the National Bank for Agriculture and Rural Development (Nabard) that it should implement the prompt corrective action (PCA) framework for Regional Rural Banks (RRBs) only after ensuring that they follow standardized non-performing asset norms. Shyamal K Bhattacharjee, General Secretary, AIRRBOF, cautioned: "There is no standardization in following regulatory guidelines among RRBs. Adoption of PCA in RRBs at this moment will have disastrous consequences on them. "Any hasty implementation without addressing the issue of standardization will be fraught with inherent risk - the risk of a faulty determination of the financial health of individual RRBs." Nabard has come up with a PCA framework to enable RRBs that fail to meet prudential requirements relating to capital adequacy, net non-performing assets (NNPAs) and return on assets (ROA) to take self-corrective action so that further deterioration in their financial position is prevented and they are nursed back to health. PCA for RRBs will be invoked once they breach trigger points on three parameters - capital to risk-weighted assets (CRAR) ratio, assets (NPAs) and profitability (ROA). The PCA framework will be implemented based on the findings of Nabard's inspection with reference to RRBs' FY2019 financial performance. RRBs were established under the Regional Rural Banks Act, 1976, to ensure sufficient institutional credit for the rural and agriculture sector. They are jointly owned by the government of India and the concerned State government and sponsor banks, with the issued capital shared in the proportion of 50 percent, 15 percent, and 35 percent respectively. Nabard is the supervisor of RRBs. Bhattacharjee elaborated: "The practice of classifying a Kisan Credit Card (KCC) loan as NPA also is widely different in different RRBs. As a huge chunk of the total advance of an RRB is KCC advance, this practice leads to RRBs getting projected in poor light owing to high NPA volume because of erroneous classification of KCC as NPA." The federation wants the freedom to amortize provisions against loss on investments over four quarters just as commercial banks have been allowed, and lower risk weight on Kisan Credit Card and Self-Help Group loans, which are priority programmes of the government. Bhattacharjee said that under the garb of financial stability, strengthening of the capital base and ensuring minimum capital adequacy ratio, RRBs have been weakened. He underscored that regardless of the yeoman service rendered by the RRBs, stringent financial yardsticks have been imposed on them.