Too Big To Fail: Domestic Systemically Important Banks (D-SIBs) 
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Why in News?  

Reserve Bank of India(RBI) has retained SBI, ICICI and HDFC Bank in Domestic Systemically Important Banks (D-SIBs) list or banks that are considered as “Too Big TFail”. 

 Facts: 

    • Domestic Systemically Important Banks(D-SIBs): D-SIBs are banks that are Too Big TFail(TBTF). According to RBI, banks become D-SIBs 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.  
    • Significance of D-SIBs: 
      • Failure of such banks will result into significant disruption to the essential banking services to banking system and the overall economy. 
      • D-SIB tag also indicates that in case of distress, the government is expected to support these banks. 
      • They are also subjected to higher levels of supervision so as to prevent disruption in financial services in the event of any failure. 
  • D-SIB Framework: The Reserve Bank had issued the framework for dealing with D-SIBs in 2014. It requires the RBI to disclose the names of banks designated as D-SIBs starting from 2015. RBI places DSIBs in one of the 5 buckets based on their systemic importance scores(SISs). 
  • As part of this framework, these three banks have to maintain additional Common Equity Tier(CET) 1 compared to other commercial banks.  
    • CET 1: It is a component of Tier 1 capital that includes ordinary shares and retained earnings. 

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