The Reserve Bank of India or the RBI continued to identify names like the State Bank of India, HDFC Bank, and ICICI Bank, as Domestic Systemically Important Banks or D-SIBs, according to a press release on Tuesday. The additional Common Equity Tier 1 or the CET1 requirement for these D-SIBs will be in addition to the Capital Conservation Buffer.

SBI, HDFC, ICICI Bank Stay Domestic Systemically Important Banks: RBI

RBI Identifies Domestic Systemically Important Banks

The Reserve Bank of India (RBI) has continued to list prominent banks such as the State Bank of India, HDFC Bank, and ICICI Bank as Domestic Systemically Important Banks or D-SIBs, as per a recent press release.

The additional Common Equity Tier 1 (CET1) requirement for these D-SIBs will be added to the existing Capital Conservation Buffer, enhancing the banks' capital adequacy ratios.

D-SIB Designations and Additional CET1 Requirements

ICICI Bank: 0.10% of Risk Weighted Assets (RWAs)
HDFC Bank: 0.40% of Risk Weighted Assets (RWAs)
State Bank of India: 0.80% of Risk Weighted Assets (RWAs)

Background on D-SIB Framework

The RBI had issued the ‘Framework for dealing with Domestic Systemically Important Banks or D-SIBs’ on July 22, 2014. This framework mandates the RBI to disclose the names of designated D-SIBs starting from 2015 and categorize them based on their Systemic Importance Scores (SIS).

The RBI's D-SIB framework aims to ensure the stability and resilience of the Indian banking system by identifying and regulating systemically important banks.