MUMBAI: The Reserve Bank of India announced on Tuesday that State Bank of India (SBI), HDFC Bank, and ICICI Bank will continue to be classified as the country's systemically important banks.
The RBI had announced the SBI and the ICICI Bank as domestic systemically important banks (D-SIB) in 2015 and 2016. In 2017, the HDFC Bank was added to the list. The current update is based on the data collected from banks as on March 31, 2025, according to an official statement.
Systemically important banks are considered too big to fail due to their size, cross-jurisdictional activities, lack of substitutability and interconnectedness. Any failure of these banks has the potential to cause large-scale disruption to the essential services they provide to the banking system and overall economic activity.
Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it. The RBI issued a directive on Tuesday that while the SBI must maintain an additional capital requirement of 0.80 percent of its risk-weighted assets, the HDFC Bank is required to maintain an additional 0.40 percent, and the ICICI Bank 0.20 percent.
The D-SIB framework, which was issued in 2014 by the RBI, requires the central bank to disclose the names of banks designated as D-SIBs and place these banks in appropriate buckets depending upon their systemic importance scores (SISs).
The Reserve Bank 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. (IANS)
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