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The Reserve Bank of India (RBI) has again classified the largest public sector bank State Bank of India (SBI) and two major private sector banks, ICICI Bank and HDFC Bank, as Domestic Systemically Important Banks (DSIs).

Business Desk: The Reserve Bank of India (RBI) has again included the largest public sector bank State Bank of India (SBI) and two major private sector banks, ICICI Bank and HDFC Bank, in the list of Domestic Systemically Important Banks (D-SIBs).

Banks have to fulfill certain conditions to come under D-SIB. These banks have been placed in a special category, according to which they are required to maintain the highest common equity tier 1 (CET1) with a capital conservation buffer. SBI has been placed in bucket 4 and will have to maintain an additional 0.80 percent common equity tier 1. At the same time, HDFC Bank is in bucket 2 and is required to maintain 0.40 percent CET1. ICICI Bank has been placed in bucket 1, which should have a CET1 buffer of 0.20 percent. RBI has also clarified that the higher D-SIB surcharge for SBI and HDFC Bank will be applicable from April 1, 2025.

D-SIBs are banks that are classified as 'too big to fail' (TBTF). The failure of these banks can have a major adverse effect, due to which the government helps such banks in times of crisis. RBI authorized these three banks in the category of D-SIB in the year 2023. The current information is based on data collected from banks till March 31, 2024.

RBI had framed the framework for D-SIB guidelines in 2014. SBI was initially included in it in 2015, while ICICI Bank was added in 2016 and HDFC Bank in 2017 to the list of D-SIBs.