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RBI names SBI, ICICI and HDFC as systemically important banks

Inclusion in the list gives additional comfort to investors that these banks won't be allowed to fail and therefore, borrowing costs of these banks from the markets are cheaper than their peers

Anup Roy 

RBI

Mumbai: The (RBI) on Thursday named State Bank of India (SBI), Bank and Bank as (D-SIBs), which in other words mean that are too big to fail.

As per the norms, these will have to set aside more capital for their continued operation. comes with the list every year since 2015. Inclusion in D-SIB indicates that failure of any of these banks would have a cascading effect on Indian financial system.

Inclusion in the list gives additional comfort to investors that these banks won’t be allowed to fail and therefore, borrowing costs of these banks from the markets are cheaper than their peers.

SBI, being in the third bucket, was setting aside 0.45 per cent of its assets till 2018-19 as a surcharge. From next year, applicable from April 1, the bank will have to set aside 0.60 per cent of its risk-weighted assets. The increase in capital is in a phased manner, with the ultimate aim of providing one full percentage point extra as capital buffer for D-SIBs.

Bank and Bank’s capital requirement rises to 0.20 per cent, from 0.15 per cent now. These two banks are in the fifth basket, and are considered less important than

First Published: Fri, March 15 2019. 00:35 IST
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