RBI releases the list of Domestic Systemically Important Banks (D-SIBs) 2021

Tags: Economics/Business

The Reserve Bank of India has retained SBI,ICICI bank and HDFC bank in the list of Domestically Systemically Important Banks(D-SIB) list for the year 2021.

• RBI started disclosing the name of the bank in the D-SIB list from 2015 and SBI was included in the list.
• ICICI Bank was included in 2016 and HDFC bank was included in 2017.

D-SIB (Domestic Systemically Important Banks )

• The concept behind D-SIB is that there are certain banks in India which cannot be allowed to fail as its failure may  badly affect the Indian economy .
• RBI selects banks on their size  and their overall contribution in the Indian economy.
• These banks have to keep an additional Common Equity Tier 1 (CET1)  apart from their capital conservation buffer .
•  SBI has to maintain an additional Common Equity Tier 1 (CET1) of 0.80% as a percentage of their Risk Weighted Assets .
• HDFC Bank and ICICI banks have to  maintain an additional Common Equity Tier 1 (CET1) of 0.20% as a percentage of their Risk Weighted Assets .

Foreign Banks having branches in India are called as Global-Systemically Important Bank(G-SIB).At present no  foreign bank has been put in the G-SIB category by RBI.