RBI says SBI, HDFC Bank and ICICI Bank remained as domestic systemically important banks

The Reserve Bank of India (RBI) on Wednesday said State Bank of India (SBI), HDFC Bank and ICICI Bank remained as domestic systemically important banks (D-SIBs). SBI and HDFC Bank would need to maintain an additional capital buffer starting April 2025, it said.

Systemically important banks are financial institutions whose failure or distress could trigger a broader financial crisis and threaten the stability of the entire financial system. These institutions are also perceived as being ‘too big to fail’.

The RBI had issued a framework for dealing with D-SIBs in July 2014, under which it named the designated banks and placed them in appropriate “buckets” depending on their systemic importance. Inclusion in the list requires lenders to maintain higher common equity tier 1 (CET1) in addition to the capital conservation buffer as per the bucket under which it has been classified.

SBI and ICICI Bank were classified as D-SIBs in 2015 and 2016. While HDFC Bank was added to the list in 2017, it was moved to a higher bucket in December 2023 following its merger with parent HDFC.

SBI continues to be in bucket 4, which will require the country’s largest lender to keep an additional CET1 of 0.80%, as per the list. HDFC Bank, the largest private sector lender, continues to The central bank said the higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 1, 2025. “Hence, up to March 31, 2025, the D-SIB surcharge applicable to SBI and HDFC Bank will be 0.60% and 0.20%, respectively,” it said.

ICICI Bank is classified in bucket 1, wherein the second-largest private sector lender will have to maintain an additional 0.20% in the CET1 buffers.