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State Bank of India, HDFC Bank and ICICI Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs) in the 2024 list of this category.
They have been named under the same bucketing structure as in the 2023 list of D-SIBs.
While the Additional Common Equity Tier 1 requirement as a percentage of Risk Weighted Assets (RWAs) for SBI has been fixed at 0.80%, it is 0.40% for HDFC Bank and 0.20% for ICICI Bank.
The higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 01, 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,” RBI said in a circular.
The Reserve Bank had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014, which was subsequently updated on December 28, 2023.
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.
In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India, i.e., additional CET1 buffer prescribed by the home regulator (amount) multiplied by India RWA as per consolidated global Group books divided by total consolidated global Group RWA.
The Reserve Bank had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016 while HDFC Bank was classified as D-SIB in 2017 along with SBI and ICICI Bank.
The current update is based on the data collected from banks as on March 31, 2024.
Published – November 13, 2024 12:00 pm IST
