What is D-SIB framework Introduced by RBI

D-SIB means Domestically Systematic Bank.Every year RBI(Reserve Bank Of India) announce list of banks who are belongs to D-SIB list.D-SIB framework has set of rules and regulations to identify banks and this was first introduced in 2008.

Why do we need this framework?

Banks are plays vital role in countries economic growth,if any worst scenario bank is not able to operate due to bad financial situation of the bank. This directly impacts persons who deposited in the bank and in turn country economic growth.In 2008 in US Lehman Brothers financial firm announced the bankruptcy due to this economical crisis happened in US. This economical crisis impacted all over the world. To avoid this kind of scenario RBI developed D-SIB framework.

Factors to find D-SIB banks

There are many factors to determine in D-SIB framework
1.Outstanding loans
2.Bank size
3.Number of transactions
4.Operational cost
5. Current financial balance to run the business and maintain the if any loss further.

Above are the some factors to decide D-SIB banks. Adding the banks to D-SIB list will not make any problem to the bank. This is the indication that banks need to improve the financial balance.This article gives overview about the D-SIB framework ,Please find the below link to read more details about D-SIB framework provide by RBI. D-SIB

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