RBI ups weight of SBI, HDFC Bank in too-big-to-fail list

Mumbai, Dec 28: The Reserve Bank of India has upgraded the weightage of SBI and HDFC Bank on its list of three Domestic Systemically Important Banks (D-SIBs) for 2023 which includes ICICI Bank as well.

The RBI said on Thursday that while ICICI Bank continues to be in the same bucket structure as last year, SBI and HDFC Bank move to higher buckets – SBI shifts from bucket 3 to bucket 4 and HDFC Bank shifts from bucket 1 to bucket 2.

The three D-SIBs are require closer regulation under which they need to set aside more capital to avoid risk because if they fail this could have a disastrous effect on the country's entire economy. These banks are also classified as "too-big-to-fail".

For SBI and HDFC Bank, the increase of 0.2 per cent in D-SIB buffer requirements on account of the bucket increase will be effective from April 1, 2025. The additional Common Equity Tier 1 (CET1) requirement will be in addition to the capital conservation buffer, the RBI said.