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Date : Sep 04, 2017
RBI releases 2017 list of Domestic Systemically Important Banks (D-SIBs)

In addition to the SBI and ICICI Bank, which continue to be identified as Domestic Systemically Important Banks (DSIBs), the Reserve Bank of India has also identified HDFC Bank as a D-SIB, under the same bucketing structure as last year. The additional Common Equity Tier 1 (CET1) requirement for D-SIBs has already been phased-in from April 1, 2016 and will become fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer.

The updated list of D-SIBs is as follows-

Bucket Banks Additional Common Equity Tier 1 requirement as a percentage of Risk Weighted Assets (RWAs) for FY 2017-18 Additional Common Equity Tier 1 requirement applicable from April 1, 2018 (as per phase-in arrangement)
5 - 0.50% 0.75%
4 - 0.40% 0.60%
3 State Bank of India 0.30% 0.45%
2 - 0.20% 0.30%
1 ICICI Bank 0.10% 0.15%
HDFC Bank* -
• D-SIB surcharge for HDFC Bank will be applicable from April 1, 2018.

Background:

The Reserve Bank had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014. The D-SIB Framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs every year in August starting from 2015 and place these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs). Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it. In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India.

The higher capital requirements are applicable from April 1, 2016 in a phased manner and will become fully effective from April 1, 2019. The additional common equity requirement for different buckets over the four year phase-in period is as under:

Bucket April 1, 2016 April 1, 2017 April 1, 2018 April 1, 2019
5 0.25% 0.50% 0.75% 1.00%
4 0.20% 0.40% 0.60% 0.80%
3 0.15% 0.30% 0.45% 0.60%
2 0.10% 0.20% 0.30% 0.40%
1 0.05% 0.10% 0.15% 0.20%

Based on the methodology provided in the D-SIB Framework and data collected from banks as on March 31, 2015 and March 31, 2016 respectively, the Reserve Bank had announced State Bank of India and ICICI Bank Ltd. as D-SIBs on August 31, 2015 and August 25, 2016 respectively. Current update is based on the data collected from banks as on March 31, 2017.

Jose J. Kattoor
Chief General Manager

Press Release: 2017-2018/624


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