Reserve Bank of India (RBI Update) has made the list of D-SIBS banks based on the data till March 31, 2024. The banks involved are considered important to the domestic financial system.
The Reserve Bank of India (RBI) has once again given the status of “Domestic Systemically Important Banks” to State Bank of India (SBI), HDFC Bank and ICICI Bank. On Wednesday, November 13, RBI released the list of these banks, in which it was told that these banks are very important for the Indian financial system.
The banks included in the D-SIBS list are considered so important in the country's economic system that their collapse can have a major impact on the entire economy.
For this reason, these banks are considered the safest (India's safest banks) and stable. If there is any financial crisis in these banks, then the government can also take steps to save them, so that the economic condition of the country is not adversely affected. Last year also, these three banks had received this status, which shows that these banks are playing an important role in terms of financial stability and security.
Reserve Bank of India (RBI Update) has made the list of D-SIBS banks based on the data till March 31, 2024. The banks involved are considered important to the domestic financial system. Such banks are required to maintain additional Common Equity Tier-1 (CET1) so that they can better manage financial risks.
This CET1 capital is more important for banks included in the list of D-SIBs, so that they have adequate resources for risk management. Its purpose is to ensure that these banks maintain financial stability during any crisis and the economic system is not negatively affected.
The concept of D-SIBs was implemented in 2014
The Reserve Bank of India first adopted the concept of preparing a list of important banks for the domestic system i.e. D-SIBS 10 years ago in the year 2014. In 2015, State Bank of India and then in the next year i.e. 2016, ICICI Bank was placed in this list. HDFC Bank entered this list in 2017.
Which bank is in which bucket?
This time RBI has placed State Bank of India (SBI) in Bucket-4, under which it will have to maintain 0.80 percent additional Common Equity Tier-1 (CET1). Similarly, HDFC Bank has been placed in Bucket-2, for which it will have to maintain 0.40 per cent more CET1 capital. ICICI Bank has been placed in Bucket-1, under which it will have to maintain an additional 0.20 percent in CET1 buffer.
These rules will come into effect from April 1, 2025. Its objective is that these banks have sufficient capital in case of any financial crisis, so that they can contribute to the economic stability of the country and face possible risks.
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