Question

Q16. Consider the following about Domestic Systemically Important Banks

1. Currently only two banks have DSIB

2. They are too big to fail

Which of the above statements are incorrect?

• A. a) 1 only
• B. b) 2 only
• C. c) Both 1 and 2
• D. d) Neither 1 nor 2

Answer 1

The correct option is A

a) 1 only

• D-SIBs are identified by RBI
• Currently there are three D-SIBs in India – ICICI, HDFC and SBI.
• D-SIB means that the bank is too big to fail. According to the RBI, some banks become systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection.
• Banks whose assets exceed 2% of GDP are considered part of this group.
• The D-SIB framework requires the RBI to disclose the names of banks designated as D-SIBs every year in August starting from August 2015.