Question

89. Which of the following statements is correct about the Systemically Important Banks?
1. Systemically important banks are perceived as banks that are ‘Too Big To Fail (TBTF)’
2. The International Monetary Fund (IMF) publishes the list of Global Systemically Important banks (G-SIBs).
3. RBI identifies the Domestic Systemically Important Banks (D-SIBs).
4. SIBs are required to maintain additional Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
Select the correct answer using the codes given below:

• A. Only 1 and 3
• B. Only 1, 3 and 4
• C. Only 2, 3 and 4
• D. Only 1, 2 and 3

Answer 1

The correct option is A Only 1 and 3

Systemically important bank or a bank that is ‘too big to fail’. These are one whose failure will have nationwide or worldwide repercussions. Basel Committee on Banking Supervision (BCBS) identifies the global systemically important banks (G-SIBs). The D-SIB Framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs every year. Recently, RBI has added HDFC Bank, the second largest private sector lender of country in list of D-SIBs. SIBs are required to maintain additional Common Equity Tier 1 (CET1).