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SBI, ICICI Bank, HDFC Bank remain as (D-SIBs)

SBI, ICICI Bank, HDFC Bank remain as (D-SIBs)_4.1

The RBI state-owned SBI, along with private-sector lenders ICICI Bank and HDFC Bank continue to be Domestic Systemically Important Banks (D-SIBs) or institutions which are ‘too big to fail’. SBI, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs), under the same bucketing structure as in the 2018 list of D-SIBs.

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About SIBs:

  • SIBs are subjected to higher levels of supervision so as to prevent disruption in financial services in the event of any failure.
  • The Reserve Bank had issued the framework for dealing with D-SIBs in July 2014.
  • The D-SIB framework requires the central to disclose the names of banks designated as D-SIBs starting from 2015 and place these lenders in appropriate buckets depending upon their Systemic Importance Scores (SISs).
  • SIBs are seen as ‘too big to fail (TBTF)’, creating the expectation of government support for them in times of financial distress. These banks also enjoy certain advantages in funding markets.

Important takeaways for all competitive exams:

  • Reserve Bank of India (RBI) Headquarters: Mumbai, Maharashtra.
  • Reserve Bank of India Establishment: 1 April 1935.
  • Reserve Bank of IndiaGovernor: Shaktikanta Das.

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