MUMBAI: State Bank of India, HDFC Bank and ICICI Bank continue to be identified as systemically important domestic banks in the 2024 list of this category prepared by the Reserve Bank of India.
They were in the same bucketing structure as in the 2023 list as well. The central bank also increased the incremental additional common equity tier 1 requirement as a percentage of risk weighted assets (RWAs) for these banks.
While for SBI it goes by 0.2-0.80% from 0.60%, for HDFC Bank it doubles to 0.40% from 0.20% now, while ICICI Bank there is no change in the charge, which is currently at 0.20% and will continue at this level this year too.
The new charges will be effective on these lenders from April 1, 2025. That means up to March 31, 2025, the surcharge applicable to SBI and HDFC Bank will be 0.60% and 0.20%, respectively,” RBI said in a circular.
While SBI and ICICI Bank got into the list in 2015 and 2016, respectively, HDFC Bank was elevated to the list in 2017.
The Reserve Bank had issued the framework for dealing with systemically important domestic banks on July 22, 2014, which was subsequently updated on December 28, 2023.
The framework requires the RBI to disclose the names of banks designated so starting from 2015 and place these banks in appropriate buckets depending on their systemic importance scores.
In case a foreign bank having branch presence here is a systemically important global bank, it has to maintain additional CET1 capital surcharge here proportionate to its RWAs here.
Central bank raised RWAs
RBI raised incremental additional common equity tier 1 requirement as a percentage of risk weighted assets for these banks. For SBI it goes up 0.2-0.8% from 0.6%, for HDFC Bank it doubles to 0.40%