Rapid revision
Test one fact at a time:open a card, recall the direct answer, then practise it in MCQ format.
What are Domestic Systemically Important Banks (D-SIBs)?
Direct Answer
Domestic Systemically Important Banks (D-SIBs) are institutions whose failure would severely disrupt the domestic economy, commonly termed Too Big To Fail
According to the Reserve Bank of India's 2025 list of Domestic Systemically Important Banks (D-SIBs), in which bucket is HDFC Bank placed?
What is the additional Common Equity Tier 1 (CET1) capital requirement?
Direct Answer
The additional Common Equity Tier 1 (CET1) capital requirement is a prudential buffer mandated for D-SIBs above the standard Basel III capital requirements
The Reserve Bank of India's December 2025 update of the Domestic Systemically Important Banks (D-SIBs) list was based on data collected from banks as of which specific date?
What are Global Systemically Important Banks (G-SIBs)?
Direct Answer
Global Systemically Important Banks (G-SIBs) are massive international institutions.
What is the additional CET1 requirement?
Direct Answer
The additional CET1 requirement is a mandatory capital buffer imposed on D-SIBs, scaled progressively across five buckets to mitigate the risk these massive institutions pose to the financial system
In the context of Domestic Systemically Important Bank, what is the difference between Phase 1: The Universe and Phase 2: The Filter?
Direct Answer
Phase 1:
The Universe:All Commercial Banks in India
Phase 2:
The Filter:Total Size > 2% of GDP
Phase 3:
The Sample:Full SIS Computation Processed
In the calculation of a bank's Systemic Importance Score (SIS) by the Reserve Bank of India,
what is the assigned mathematical weight for the "Size" indicator?
How is capital adequacy classified?
Direct Answer
Capital adequacy is divided into tiers based on loss-absorbing capacity.
What is the Maximum Distributable Amount (MDA) framework?
Direct Answer
The Maximum Distributable Amount (MDA) framework is a punitive regulatory mechanism that restricts a bank's cash outflows if its capital falls into the required buffer zone
What is the Transition Period?
Direct Answer
The Transition Period is the regulatory grace time provided to a D-SIB to raise or retain sufficient capital when its systemic footprint expands enough to trigger a higher buffer requirement
What is the difference between Included in SIS and Excluded from SIS?
Direct Answer
Included in SIS:1. Domestic Branches
2. Foreign Branches
3. Banking Subsidiaries
4. Financial Subsidiaries (e.g., Mutual Funds)
Excluded from SIS:Insurance Subsidiaries (handled by IRDAI)
What is the Size of a bank in systemic risk terms?
Direct Answer
The "Size" of a bank in systemic risk terms is not just its physical assets or stock value; it represents the absolute total exposure the bank has to the economy, both on and off the balance sheet
What is Systemic Importance Scores (SIS)?
Direct Answer
The SIS is a relative measure, meaning a bank's score represents its percentage share of the total systemic risk present within the entire sample of large Indian banks
In the context of Domestic Systemically Important Bank, what is the difference between Sub-indicator 1 and Sub-indicator 2?
Direct Answer
Sub-indicator 1:Notional amount of OTC derivatives
Sub-indicator 2:Cross-jurisdictional liabilities
Sub-indicator 3:Trading and AFS securities
In the context of Domestic Systemically Important Bank, what is the difference between Vector 1 and Vector 2?
Direct Answer
Vector 1:Intra-financial system assets (e.g., loans given to other banks)
Vector 2:Intra-financial system liabilities (e.g., deposits held from other banks)
Vector 3:Securities outstanding