SBI, ICICI, HDFC Bank remain systemically important banks: RBI

The Reserve Bank of India (RBI) said State Bank of India, ICICI Bank and HDFC Bank continue to remain Domestic Systemically Important Banks (D-SIBs).

SIBs are perceived as ones that are ‘Too Big To Fail’ and their continued functioning is critical for the uninterrupted availability of essential banking services to the real economy.

Banks classified as D-SIBs are subjected to additional common equity tier 1 (CET1) capital requirements in addition to the capital conservation buffer. The additional CET 1 requirement as a percentage of Risk Weighted Assets for SBI stands at 0.6 per cent, and 0.20 per cent each for ICICI and HDFC Bank, RBI said.

The additional CET1 requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019.

The RBI had issued the framework for dealing with Domestic Systemically Important Banks in July 2014. It requires to disclose the banks designated as D-SIBs since 2015 and place them in buckets depending on Systemic Importance Scores. The RBI had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016. As on March 31, 2017, HDFC Bank was also classified as a D-SIB. The current update is based on bank data as on March 31, 2022, the RBI said.