SBI, ICICI & HDFC Bank ‘too big to fail’

The 2021 list is based on the data collected from banks as on 31 March 2021. Systemically important banks are subjected to additional measures to deal with systemic risks.
SBI (File Photo | EPS)
SBI (File Photo | EPS)

NEW DELHI: No new banks have been added to the Reserve Bank of India’s list of Domestic Systemically Important Banks (D-SIBs) as State Bank of India (SBI), ICICI Bank and HDFC Bank continue to be identified as systematically important banks, or banks that are too big to fail, in 2021.

Accordingly, these banks will be required to have additional Common Equity Tier 1 (CET1) capital. As per the list released by RBI on Tuesday, SBI would require 0.6% of its risk weighted average asset as additional CET1, while ICICI Bank and HDFC Bank would require 0.2% as additional CET1.

The 2021 list is based on the data collected from banks as on 31 March 2021. Systemically important banks are subjected to additional measures to deal with systemic risks. The Domestic Systemically Important Banks framework requires the RBI 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).

The importance of these banks are measured based on their size, interconnectedness, substitutability and complexity. Based on their scores, banks are categorised into four buckets and are required to have additional Common Equity Tier 1 capital requirement,

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