Current Affairs

Domestic Systemically necessary Banks (D-SIBs) – Update (January, 2023)


The Reserve Bank of India (RBI) has named the top three lenders in India – State Bank of India (SBI), ICICI Bank, and HDFC Bank – as Domestic Systemically Important Banks (D-SIBs), or banks that are too big to fail. In other words, these banks are interconnected entities whose failure could potentially impact the entire financial system and cause instability. As a result, they are subject to closer supervision and regulation by the RBI.

 D-SIB?

A D-SIB may be a bank that's thought-about to be thus necessary to the economic system that its failure might cause important disruption. As a result, these banks area unit needed to keep up higher capital buffers to guard against potential losses and guarantee their stability. In India, the RBI has established a framework for handling D-SIBs, which needs the central bank  to disclose the names of selected banks ranging from 2015 and place them in acceptable buckets supported their systematic  importance.

How area unit D-SIBs regulated?

In addition to the standard capital conservation buffer, D-SIBs in India area  needed to keep up further Common Equity Tier 1 (CET1) capital. According to  the RBI’s latest release, SBI should maintain an extra 0.60% CET1 as a share of its risk-weighted assets, whereas ICICI Bank and HDFC Bank should maintain an extra 0.20% each.

Foreign banks with a branch presence in india that are designated as Global Systemically necessary Banks (G-SIBs) should also maintain further CET1 capital surcharges in India as needed by the principles for G-SIBs.

Why these 3 banks selected as D-SIBs?

The RBI announced SBI and ICICI Bank as D-SIBs in 2015 and 2016, respectively. Based on data from banks as of March 31, 2017, HDFC Bank was also classified as a D-SIB, along with SBI and ICICI Bank. The current update is based on data from banks as of March 31, 2022.

For further details, read our course pages to understand well about the exam.

For admissions: Call 7418968881.

FRESH BATCHES ARE OPEN, ENROLL NOW, ONLINE & OFFLINE

Get selected in Top Banks in India.

 

For Free Study Materials: Click here: TAMIL ENGLISH materials for free

Read Daily Current Affairs : Click here : TAMIL ENGLISH

Download Pdf Current affairs magazine, monthly edition : Click here

 

Also for your exam preparation, you may follow us on the following links.

Face book: https://www.facebook.com/BEST-Learning-CentreAn-IAS-Academy-101625595410637

Website: https://www.bestlearningcentre.in/

Telegram: https://t.me/best_learning_Center

YouTube: https://www.youtube.com/channel/UC8ddoKP7u8EDSXVjzzct4Nw

Instagram: https://www.instagram.com/possible2you/

Domestic Systemically necessary Banks (D-SIBs) – Update (January, 2023)