State Bank of India, HDFC Bank and ICICI Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs) in the 2024 list of this category.
- They have been named under the same bucketing structure as in the 2023 list of D-SIBs.
- Systemically Important Banks (SIBs) are perceived as banks that are ‘Too Big To Fail (TBTF)’ and their continued functioning is crucial for the uninterrupted availability of essential banking services to the real economy.
- The Additional Common Equity Tier (CET) 1 requirement as a percentage of Risk Weighted Assets (RWAs) for SBI has been fixed at 0.80%, for HDFC Bank at 0.40% and for ICICI Bank at 0.20%. The higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 01, 2025.
- RBI had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014, which was subsequently updated on December 28, 2023.
- The D-SIB framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs starting from 2015 and place these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs).
- Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it.
- In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India.
- The Reserve Bank had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016 while HDFC Bank was classified as D-SIB in 2017 along with SBI and ICICI Bank.
- The Financial Stability Board (FSB), in consultation with Basel Committee on Banking Supervision (BCBS) and national authorities identify the list of global systemically important banks (G-SIBs).
