The Reserve Bank of India has once again classified SBI, HDFC Bank and ICICI Bank as Domestic Systemically Important Banks (D-SIBs). These lenders must continue maintaining additional CET1 capital buffers over the Capital Conservation Buffer. The D-SIB framework ranks banks based on systemic importance and has been in place since 2015.

SBI, HDFC Bank, ICICI Bank stay on RBI’s Systemically Important list with extra capital buffer

Reserve Bank Maintains SBI, HDFC Bank, ICICI Bank as D-SIBs

State Bank of India, HDFC Bank, and ICICI Bank Remain Category Leaders

The Reserve Bank of India announced on Tuesday that State Bank of India, HDFC Bank, and ICICI Bank continue to be classified as Domestic Systemically Important Banks (D-SIBs). As D-SIBs, these three lenders will be mandated to hold additional capital buffers as a percentage of risk-weighted assets (RWAs) above the Capital Conservation Buffer.

Additional CET Requirements for D-SIBs

The Reserve Bank has assigned the following additional Common Equity Tier 1 (CET1) requirements for the D-SIBs:

SBI: 0.80% of RWAs
HDFC Bank: 0.40% of RWAs
ICICI Bank: 0.20% of RWAs

D-SIB Framework: A Brief Overview

The Reserve Bank had initially introduced the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) in 2014. This framework was later updated in 2023. Key aspects of the D-SIB framework include: