RBI adds HDFC among banks ‘too big to fail’ with SBI, ICICI

RBI adds HDFC among banks ‘too big to fail’ with SBI, ICICI

The Reserve Bank of India (RBI) on Monday announced it has added private lender HDFC Bank to its list of “domestic systemically important banks” (D-SIBs) considered too big to fail.

“In addition to the SBI (State Bank of India) and ICICI Bank, which continue to be identified as Domestic Systemically Important Banks (D-SIBs), the Reserve Bank of India has also identified HDFC Bank as a D-SIB, under the same bucketing structure as last year,” an RBI release said here.

The D-SIB categorisation imposes additional capital requirements on the banks classified as such.

“The additional Common Equity Tier 1 (CET1) requirement for D-SIBs will become fully effective from April 1, 2019. The additional CET1 or core capital requirement will be in addition to the capital conservation buffer,” the statement said.

“D-SIB surcharge for HDFC Bank will be applicable from April 1, 2018,” it added.

The RBI had issued the framework for dealing with D-SIBs in July 2014.

With HDFC Bank’s inclusion, there are now three banks that are described as too big to fail, including state-run State Bank of India and private lender ICICI Bank.

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