fbpx

RBI retains SBI, ICICI and HDFC Banks as ‘TOO BIG TO FAIL’ banks

  • IASbaba
  • January 22, 2021
  • 0
UPSC Articles
Print Friendly, PDF & Email

RBI retains SBI, ICICI and HDFC Banks as ‘TOO BIG TO FAIL’ banks

Part of: GS Prelims and GS- III – Banking

In news 

  • The RBI has retained State Bank of India, ICICI Bank and HDFC Bank as domestic systemically important banks (D-SIBs) or banks that are considered as “too big to fail”.

Key takeaways

  • The RBI had issued the framework for dealing with domestic systemically important banks on July 22, 2014.
  • The D-SIB framework requires the RBI to disclose the names of banks designated as D-SIBs starting from 2015 and place these banks in appropriate buckets depending upon their systemic importance scores (SISs).
  • According to analysts, too big to fail is a phrase used to describe a bank or company that’s so entwined in the economy that its failure would be catastrophic.
  • In case a foreign bank having branch presence in India is a global systemically important bank (G-SIB), it has to maintain additional capital surcharge in India as applicable to it as a G-SIB, proportionate to its risk weighted assets (RWAs) in India.

For a dedicated peer group, Motivation & Quick updates, Join our official telegram channel – https://t.me/IASbabaOfficialAccount

Search now.....