D-SIB Status: The Reserve Bank of India (RBI) has retained the State Bank of India (SBI), HDFC Bank, and ICICI Bank as Domestic Systemically Important Banks (D-SIBs) for 2024.

  • Bucketing: These banks remain in the same “buckets” as in the 2023 list:
    • SBI: Bucket 4
    • HDFC Bank: Bucket 3
    • ICICI Bank: Bucket 1
  • What is a D-SIB?: D-SIBs are banks that are considered “Too Big To Fail” (TBTF), meaning their failure could disrupt essential banking services and the economy.

Why D-SIBs Matter

  • Risks: D-SIBs, due to their size and interconnectedness, can cause significant disruption if they fail.
  • Government Support: These banks are perceived to receive government support during times of distress, which can reduce market discipline and increase risks.

Capital Requirements for D-SIBs

  • Additional Capital: D-SIBs must hold extra capital based on their systemic importance.
    • SBI: Additional 0.80% of Risk-Weighted Assets (RWAs)
    • HDFC Bank: Additional 0.40% of RWAs
    • ICICI Bank: Additional 0.20% of RWAs
  • Effective Date: Higher capital requirements for SBI and HDFC Bank will take effect from April 1, 2025.

How D-SIBs Are Selected

  • Selection Process:
    • The RBI assesses banks for systemic importance using a range of indicators, such as size and interconnectedness.
    • Banks with systemic importance above a certain threshold are classified as D-SIBs.
  • Bucketing: Banks are placed in different buckets based on their systemic importance score, with higher buckets attracting higher capital requirements.

Global Systemically Important Banks (G-SIBs)

  • Global List: The Financial Stability Board (FSB) has identified 29 G-SIBs for 2023, including major global banks like JP Morgan Chase, Bank of America, Citigroup, and HSBC.
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