RAS question
Which banks are designated as Domestic Systemically Important Banks (D-SIBs) in India?
Correct answer: (C) SBI, ICICI Bank, HDFC Bank.
The Reserve Bank of India identifies State Bank of India, HDFC Bank and ICICI Bank as Domestic Systemically Important Banks in India.
Explanation
RBI's 2024 D-SIB release says SBI, HDFC Bank and ICICI Bank continue to be identified as Domestic Systemically Important Banks. This matters because the D-SIB framework does not cover every large or public-sector bank automatically; RBI names specific banks and places them in buckets based on systemic importance. The bucket then determines the additional Common Equity Tier 1 requirement over the capital conservation buffer. In the RBI list, SBI is placed in Bucket 4 with a 0.80% additional CET1 requirement, HDFC Bank in Bucket 2 with 0.40%, and ICICI Bank in Bucket 1 with 0.20%. Therefore, the correct set is SBI, ICICI Bank and HDFC Bank, not a wider category such as all PSU banks.
Why the other options are wrong
- (A) Only SBI is too narrow because RBI's D-SIB list also names HDFC Bank and ICICI Bank.
- (B) All PSU banks is too broad because RBI designates named banks under the D-SIB framework, not every public-sector bank as a class.
- (D) SBI and PNB is wrong because RBI's list includes SBI, HDFC Bank and ICICI Bank, while PNB is not listed as a D-SIB.
Concept
This tests RBI's prudential regulation framework for systemically important banks. It recurs in RAS because banking stability, capital buffers and RBI regulatory lists are standard Indian Economy current-affairs areas.