RBI tags SBI, ICICI Bank, HDFC Bank as Systemically Important Banks

While ICICI Bank and HDFC Bank, placed in bucket 1, need to make a provision of 0.20% towards additional Common Equity Tier 1 requirement as percentage of Risk Weighted Assets, it would be 0.60% in the case of SBI which is placed in bucket 3, as per the RBI circular

State Bank of India, ICICI Bank, and HDFC Bank have again been named as Domestic Systemically Important Banks (D-SIBs) by the Reserve Bank of India (RBI) based on data collected as on March 2022. 

“State Bank of India (SBI), ICICI Bank and HDFC Bank continue to be identified as D-SIBs, under the same bucketing structure as in the 2021 list of D-SIBs,” the RBI said in a circular.

“The additional Common Equity Tier 1 (CET1) requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer,” the central bank said. 

While ICICI Bank and HDFC Bank, placed in bucket 1, need to make a provision of 0.20% towards additional Common Equity Tier 1 requirement as percentage of Risk Weighted Assets, it would be 0.60% in the case of SBI which is placed in bucket 3, as per the RBI circular.

The D-SIBs framework was issued by the RBI on July 22, 2014 and this 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).