RBI said this big thing about SBI HDFC Bank and ICICI Bank

Domestic Systemically Important Bank: The largest public sector bank State Bank of India (SBI) and two private sector giants ICICI Bank and HDFC Bank have again been selected as important domestic banks (D-SIBs). Banking sector regulator Reserve Bank of India has included SBI, ICICI Bank and HDFC Bank in the category of (D-SIB).

To be included in the list of D-SIB, banks have to fulfill certain conditions. According to the bucket in which these banks have been classified, it is necessary to maintain the Higher Common Equity Tier 1 (CET1) along with the capital conservation buffer. SBI is included in Bucket 4 and the bank will have to maintain 0.80 percent additional common equity tier 1 as per the list. HDFC Bank is included in Bucket 2 and the bank will have to maintain 0.40 percent common equity tier 1. ICICI Bank is included in Bucket 1. The bank will have to keep 0.20 percent CET1 buffer. RBI said that higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 1, 2025.

SIBs are those banks which fall in the category of Too Big to Fail (TBTF). Failure of these banks can have a big impact. The government helps such banks in case they fail due to TBTF status. RBI had included these three banks in the category of D-SIB in the year 2023. The current update is based on data collected from banks till March 31, 2024.

RBI had prepared the framework regarding D-SIB in the year 2014. And in the year 2015, SBI and in the year 2016, ICICI Bank was included in it. In the year 2017, HDFC Bank was also included in the list along with these two banks.

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