Mumbai, Jan 4 (PTI) The RBI on Tuesday said 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'.

SIBs are perceived as banks that are 'too big to fail (TBTF)'. This perception of TBTF creates an expectation of government support for these banks in times of distress. Due to this perception, these lenders enjoy certain advantages in the funding markets.

Also Read | Peacemaker: Streaming Date and Time, Where to Watch John Cena, James Gunn’s Upcoming DC Show Online!.

"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 2020 list of D-SIBs," the Reserve Bank said in a statement.

The additional Common Equity Tier 1 (CET1) requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019.

Also Read | COVID-19 in India: Massive Surge in Coronavirus Cases Indicative of Third Wave, Says Expert.

The additional CET1 requirement will be in addition to the capital conservation buffer.

The Reserve Bank of India (RBI) had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016.

Based on data collected from banks as on March 31, 2017, HDFC Bank was also classified as a D-SIB.

The current update is based on data collected from banks as on March 31, 2021.

The framework for dealing with D-SIBs was issued in July 2014.

The framework requires the RBI 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).

Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it.

The Additional Common Equity Tier 1 requirement as a percentage of Risk Weighted Assets (RWAs) in case of SBI is 0.6 per cent, and 0.2 per cent for ICICI Bank and HDFC Bank.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)