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State Bank of India (SBI), HDFC Bank, and ICICI Bank are still regarded as systemically important banks, according to a statement released by the Reserve Bank of India (RBI) on Wednesday. SBI and HDFC Bank must continue to maintain additional capital buffers beginning in April 2025.
SBI’s additional capital requirement will rise from 0.60 percent of its risk-weighted assets to 0.80 percent on April 1, 2025, a 20 basis point (bps) increase. The additional capital requirement for HDFC Bank will also rise by the same amount, from 0.20 percent of its risk-weighted assets to 0.40 percent.
Because of their size, cross-jurisdictional operations, complexity, lack of substitutability, and interconnectedness, banks that are deemed too big to fail are known as systemically important banks. The disorderly failure of these banks has the potential to cause significant disruption to the essential services they provide to the banking system and, in turn, to the overall economic activity.
RBI had classified SBI and ICICI Bank as domestic systemically important banks (D-SIBs) in 2015 and 2016, respectively. HDFC Bank was also categorised as a D-SIB in 2017.
The central bank must reveal the names of banks designated as D-SIBs and assign them to the proper buckets according to their Systemic Importance Scores (SISs) under the D-SIB framework, which was released by the RBI in 2014.
A D-SIB may be subject to an additional common equity requirement, depending on the bucket in which it is placed.