These 3 Banks are most safest banks, the RBI said
RBI: If you are a customer of SBI, HDFC, or ICICI Bank, a big news for you. RBI has once again said that the government and RBI will not allow these three banks to go down. These three banks are so large and important that if any one of them goes down, the entire economy of the country could face problems. Therefore, they have been designated as VIP banks of the banking system, or Domestic Systemically Important Banks (D-SIBs). This means, RBI will not allow to down these banks.
Why are these banks special? According to the RBI rule, these banks keep more capital than other banks. This is called Common Equity Tier(CET1). It is safe from any difficult situation. The bigger the bank, the more CET1 it has to hold.
-RBI first introduced the concept of D-SIB in 2014.
-SBI was the first to join this list in 2015.
-ICICI Bank joined in 2016.
-HDFC Bank was added in 2017.
-Since then, these banks have been considered the backbone of the country’s economy.
-How much extra capital will be required?
-The RBI places each bank in a different bucket based on its size and importance.
-SBI – Bucket 4 – Maximum 0.80% extra CET1 required
-HDFC Bank – Bucket 2 – 0.40% extra CET1
-ICICI Bank – Bucket 1 – 0.20% extra CET1
-These rules will come into effect from April 1, 2027.
What does this mean for the general public? This simply means that these banks are considered safer. They will have enough extra capital to handle even the biggest economic shocks. And even if major problems arise, the government and RBI will ensure these banks don’t collapse.
