RBI Retains SBI, HDFC Bank, ICICI Bank as Domestic Systemically Important Banks

Mumbai, Dec 2025 : The Reserve Bank of India (RBI) on Tuesday announced that State Bank of India (SBI), HDFC Bank, and ICICI Bank will continue to be classified as the country’s Domestic Systemically Important Banks (D-SIBs).

The RBI initially designated SBI and ICICI Bank as D-SIBs in 2015 and 2016, respectively, while HDFC Bank was added to the list in 2017. The latest update is based on data collected from banks as of March 31, 2025, according to an official statement.

Systemically important banks are considered “too big to fail” due to their significant size, cross-jurisdictional operations, lack of substitutability, and high degree of interconnectedness. The failure of such banks could trigger large-scale disruptions to the essential services they provide to the banking system and overall economic activity.

Under the RBI framework, D-SIBs are categorized into buckets according to their Systemic Importance Scores (SIS), with each bucket carrying an additional Common Equity Tier 1 (CET1) capital requirement above the standard Basel III norms.

For the current assessment, the RBI has issued the following additional capital requirements:

• SBI – 0.80% of risk-weighted assets
• HDFC Bank – 0.40%
• ICICI Bank – 0.20%

The D-SIB framework, introduced by the RBI on July 22, 2014, and subsequently updated on December 28, 2023, mandates that the central bank publicly disclose the names of banks designated as D-SIBs and classify them according to their systemic importance.

In RBI terminology, the CET1 surcharge is an additional equity buffer over the Basel III requirement, designed to strengthen banks that are critical to the financial system. The exact CET1 percentage is determined by the bucket in which a bank is placed, reflecting its potential impact on the economy in the event of distress.

For foreign banks operating in India that are classified as Global Systemically Important Banks (G-SIBs), the additional CET1 capital requirement is applied proportionately to their risk-weighted assets (RWA) in India, based on the surcharge prescribed by their home regulator. The calculation involves multiplying the home regulator’s CET1 buffer by the bank’s RWA in India and dividing it by the total consolidated global RWA.

This framework ensures that banks whose operations have wider systemic implications maintain sufficient capital buffers, enhancing the stability of the Indian financial system and mitigating the risk of systemic crises.

The RBI’s latest notification underscores the continued systemic importance of SBI, HDFC Bank, and ICICI Bank, ensuring that these institutions maintain adequate equity capital to protect against potential shocks and safeguard the broader economy.