Domestic Systemically Important Bank

Domestic Systemically Important Banks (D-SIBs) are banks identified by the Reserve Bank of India (RBI) as institutions whose failure would have a cascading adverse impact on the entire financial system and economy due to their size, interconnectedness, complexity, and substitutability. D-SIBs are subject to enhanced regulatory requirements including additional capital buffers (Common Equity Tier 1) beyond the Basel III minimum.

• 1 Framework issued by RBI in 2014 based on Basel Committee's G-SIB framework
• 2 Assessment criteria — size, interconnectedness, substitutability, complexity
• 3 Current D-SIBs (2024) — SBI (Bucket 3), HDFC Bank (Bucket 1), ICICI Bank (Bucket 1)
• 4 Additional CET1 capital requirement — Bucket 1 (0.20%), Bucket 2 (0.40%), Bucket 3 (0.60%)
• 5 Too-big-to-fail doctrine — implicit government guarantee as failure would trigger systemic crisis
• 6 Moral hazard — D-SIB status may encourage risk-taking due to expected government bailout
• 7 G-SIBs (Global) — identified by Financial Stability Board (FSB); no Indian bank is currently a G-SIB
• 8 Updated annually by RBI based on data as of March 31
• 9 Basel III norms — minimum CET1 of 8%, total capital adequacy ratio of 11.5% for Indian banks

HDFC Bank's designation as a D-SIB means it must maintain additional capital buffers and faces enhanced RBI scrutiny, reflecting the systemic risk its potential failure would pose to India's financial system.