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Economy
Mahesh

04/01/23 08:01 AM IST

SBI, ICICI Bank, HDFC Bank continue to be too big to fail

In News
  • The top three Indian lenders - State Bank of India, ICICI Bank, and HDFC Bank - stayed Domestic Systemically Important Banks (D-SIBs) for the banking regulator as the Reserve Bank of India (RBI) lists out lenders that are too big to fail.
About D-SIBs
  • D-SIBs are those interconnected entities, whose failure can impact the whole of the financial system and create instability.
  • Systemically important banks attract closer supervision and regulation from the country's central bank as these entities are considered to be too big-to-fail banking companies.
  • In addition to the usual capital conservation buffer, D-SIBs in India are required to maintain additional Common Equity Tier 1 (CET1) capital.
  • According to the RBI’s latest press release, SBI must maintain an additional 0.60% CET1 as a percentage of its risk-weighted assets, while ICICI Bank and HDFC Bank must maintain an additional 0.20% each.
  • Foreign banks with a branch presence in India that are designated as Global Systemically Important Banks (G-SIBs) must also maintain additional CET1 capital surcharges in India as required by the rules for G-SIBs.
Source- Economic Times

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