RBI Releases List of Domestic Systemically Important Banks

The additional common equity tier 1 requirement for domestic systemically important banks was phased-in from April 01, 2016 and became fully effective from April 01, 2019. RBI had issued the framework for domestic systemically important banks on July 22, 2014. This framework requires RBI to disclose the names of banks designated as domestic systemically important banks and place these banks in appropriate buckets, depending on their Systemic Importance Scores. Based on the bucket in which such a bank is placed, an additional common equity requirement has to be applied to it. In case a foreign bank with a branch in India is a global systemically important bank or G-SIB, it has to maintain additional common equity tier 1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its risk-weighted assets in India.

Keywords: Asia Pacific, India, Banking, D-SIBs, Basel, Regulatory Capital, Systemic Risk, RBI