Mumbai: The Reserve Bank of India (RBI) has said that the country’s largest lender State Bank of India (SBI) as well as private banks such as HDFC and ICICI are Domestic Systemically Important Banks (D-SIBs) or entities that are ‘very large’. Huh. failed’.
“SBI, ICICI Bank and HDFC Bank continue to be recognized as Domestic Systemically Important Banks (D-SIBs) with the same bucketing structure in the D-SIBs’ list for 2020,” the central bank said in a statement. is under.”
Since SIBs are considered to be “safe” institutions, they make the assumption of getting government support in times of financial stress, and thereby give them some leverage in the markets.
The Additional Common Equity Tier 1 (CET1) requirement for D-SIBs was implemented in a phased manner with effect from 1 April 2016 and became fully effective from 1 April 2019.
The additional CET1 requirement will be in addition to the capital conservation buffer.
SBI and ICICI Bank were declared D-SIBs by RBI in 2015 and 2016.
Based on the data collected from banks till March 31, 2017, HDFC Bank was also classified as D-SIB.
The current update is based on the data collected from banks till March 31, 2021.
The Framework for dealing with D-SIBs was released in July 2014.
The framework requires the RBI to disclose the names of banks designated as D-SIBs starting 2015 and place these lenders in appropriate buckets based on their Systemic Importance Score (SIS).
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