Ques: Recently, which of the two banks domestic systemically important banks (D-SIBs) have been declared by RBI?
a. SBI and Canara bank
b. SBI and ICICI bank
c. Punjab National bank and Bank of Baroda
d. SBI and Bandhan bank
Ans: b
Related facts:
- 31 August, 2015, the Reserve Bank of India announced the designation of State Bank of India and ICICI Bank Ltd. as Domestic Systemically Important Banks (D-SIBs).
- This means that these banks in the nation’s banking system play such a significant role that the losses of these banks should be prevented in any situation.
- It is important to know that the Reserve Bank had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014.
- The D-SIB Framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs every year in August starting from August 2015.
- The D-SIB Framework specifies a two-step process of identification of D-SIBs. In the first step, the sample of banks to be assessed for systemic importance has to be decided.
- The additional Common Equity Tier-1 (CET1) requirements applicable to D-SIBs will be applicable from April 1, 2016 in a phased manner and would become fully effective from April 1, 2019.
- The additional CET1 requirement will be in addition to the capital conservation buffer.
- RBI also said that in case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its risk weighted assets (RWAs) in India.
Reference:
https://www.rbi.org.in/hindi/Scripts/PressReleases.aspx?ID=26657