The Reserve Bank of India (RBI) has again included State Bank of India (SBI), HDFC Bank and ICICI Bank in the list of domestic systemically important banks (D-SIBs).
The list of D-SIBs was released by the RBI on Wednesday. To be included in this list, lenders are required to maintain high ‘Common Equity Tier 1’ (CET 1) in addition to capital conservation reserves as per the ‘bucket’ under which it is classified.
HDFC Bank placed in ‘Bucket 2’
According to the list, State Bank of India (SBI) still remains in ‘Bucket 4’, for which the country’s largest lender will have to maintain an additional CET-1 of 0.80 percent. HDFC Bank, the largest private sector lender, has been placed in ‘Bucket 2’, under which it will have to maintain 0.40 percent more CET-1. The central bank said that the higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 1, 2025. ‘Therefore, the D-SIB surcharge applicable on SBI and HDFC Bank till March 31, 2025 will be 0.60 percent and 0.20 percent respectively.’
Categorization based on data till March 31
ICICI Bank has been categorized in ‘Bucket 1’, in which the second largest private sector lender will have to maintain an additional 0.20 percent in CET 1 reserves. RBI said that this classification is based on data collected from banks till March 31, 2024. The central bank first announced the framework to deal with D-SIBs in 2014. SBI and ICICI Bank were included in this list in 2015 and 2016. In 2017, HDFC Bank was also included in the list along with two other banks.
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