Consider the following statements:
Statement I: The Union Ministry of Finance classifies certain banks as Domestic Systemically Important Banks (D-SIBs).
Statement II: D-SIBs are banks whose failure can cause significant disruption in the financial system, and they are required to maintain additional capital buffers.
Which one of the following is correct in respect of the above statements?
1
Both Statement I and Statement II are correct, and Statement II explains Statement I.
2
Both Statement I and Statement II are correct, but Statement II does not explain Statement I.
3
Statement I is correct, but Statement II is incorrect.
4
Statement I is incorrect, but Statement II is correct.