The Reserve Bank of India (RBI) stated on Tuesday that Airtel Payments Bank has been added to the second schedule of the Reserve Bank of India Act, 1934.
According to the central bank, SBI, ICICI, and HDFC banks would continue to be recognised as Domestic Systemically Important Banks (D-SIBs) under the same bucketing structure as in the 2020 list of D-SIBs.
“From April 1, 2016, the increased Common Equity Tier 1 (CET1) requirement for D-SIBs was phased in and became completely effective on April 1, 2019.” The RBI announcement added, “The increased CET1 requirement will be in addition to the capital conservation buffer.”
On July 22, 2014, the RBI published the Framework for Dealing with D-SIBs. Starting in 2015, the D-SIB framework compels the central bank to reveal the names of banks classified as D-SIBs and put them in relevant buckets based on their Systemic Importance Scores (SISs).
A D-SIB must meet an extra common equity criterion based on the bucket in which it is placed. It added that if a foreign bank with a branch in India is a Global Systemically Important Bank (G-SIB), it must maintain an additional CET1 capital surcharge proportionate to its risk-weighted assets (RWAs) in India, i.e., the additional CET1 buffer prescribed by the home regulator (amount) multiplied by India RWA as per consolidated global group books divided by total consolidated global group RWA.
In 2015 and 2016, the RBI designated SBI and ICICI Bank as D-SIBs. HDFC Bank, along with SBI and ICICI Bank, was designated as a D-SIB based on data received from banks as of March 31, 2017. The most recent update is based on information gathered from banks as of March 31, last year.