RBI identifies SBI and ICICI Bank as systemically important banks in India

KOLKATA: Reserve Bank of India has identified State Bank of India and ICICI Bank as systemically important banks in India, requiring these lenders to keep aside additional capital to cover risk.

Their capital requirement rises by 0.6% and 0.2% respectively, but this may not have much significance because banks in India in general maintain more than two to three percentage points more capital than regulatory stipulation.

The baking regulator said the additional common equity tier 1 requirements for SBI and ICICI Bank will be applicable from April 1, 2016 in a phased manner and would become fully effective from April 1, 2019. This will be in addition to the capital conservation buffer.

RBI executive director NS Vishwanathan said Monday that Indian banks need to adhere to more stringent capital requirements compared to their global counterparts under the new Basel III framework because of the many gaps existing in the system.