Reserve Bank of India (RBI) has released the 2023 list of domestic systemically important banks (D-SIBs) on Thursday in which State Bank of India (SBI), HDFC Bank, and ICICI Bank continue to be listed.
“While ICICI Bank continues to be in the same bucketing structure as last year, SBI and HDFC Bank move to higher buckets – SBI shifts from bucket 3 to bucket 4, and HDFC Bank shifts from bucket 1 to bucket 2,” RBI said in a statement.
The central bank said the SBI’s additional common equity Tier 1 (CET-1) requirement as a percentage of Risk Weighted Assets will be 0.80% as compared to 0.60%, while for HDFC Bank, it will be 0.40% as compared to 0.20%.
ICICI Bank will continue to have a CET1 requirement of 0.20% of its risk-weighted assets.
For SBI and HDFC Bank, the higher D-SIB buffer requirements due to the bucket increase will be effective from April 1, 2025, RBI said.
The additional Common Equity Tier 1 (CET1) requirement will be in addition to the capital conservation buffer.
The D-SIB framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs starting from 2015 and place these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs). Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it.
The Reserve Bank had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016 respectively.
