The Reserve Bank of India has again nominated three banks in the country – State Bank of India, HDFC Bank and ICICI Bank – as domestic systemically important banks (D-SIBs). The central bank has said that these three banks will remain domestic systemically important banks even in 2024. According to PTI news, the Reserve Bank released the list of D-SIBs on Wednesday. To be included in the list, banks are required to maintain a high Common Equity Tier 1 (CET 1) in addition to the capital conservation buffer as per the bucket under which it is classified.
State Bank of India (SBI) in Bucket 4
According to the news, State Bank of India (SBI) remains in Bucket 4, for which the country's largest bank will have to keep an additional CET 1 of 0.80 percent as per the list. HDFC Bank, the largest private sector lender, remains in Bucket 2, under which it will have to maintain 0.40 per cent higher CET1.
The central bank said that the higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 01, 2025. Therefore, till March 31, 2025, the D-SIB surcharge applicable on SBI and HDFC Bank will be 0.60 per cent and 0.20 per cent respectively.
Based on data as of March 31, 2024
ICICI Bank is classified in Bucket 1, in which the second largest private sector lender will have to maintain an additional 0.20 per cent in the CET 1 buffer. RBI said the classification is based on data collected from banks till March 31, 2024. RBI first announced the framework to deal with de-SIBs in 2014 and tagged SBI and ICICI Bank in the list in 2015 and 2016. In the year 2017, it added HDFC Bank to the list along with other two banks.
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