- Identification:
- RBI declares banks with asset size > 2% of GDP as Domestically Systemically Important Banks (DSIBs).
- RBI also declares Domestic Systemically Important NBFCs if their asset size > Rs. 500 crores.
- IRDAI declares Domestic Systemically Important Insurers (D-SII) based on assets and premium.
- SEBI declares Domestically Systemically Important Financial Market Infrastructure (FMI).
- Criticality for Stability:
- Their failure can cause significant disruption to financial services.
- This can lead to overall economic instability.
- They are subject to additional regulatory/supervisory measures (e.g., capital requirements).
- This is to mitigate the risks they pose to the financial system.