The RBI on Monday included HDFC Bank in the list of ‘too big to fail’ lenders, referred to as D-SIB or domestic systemically important bank. India’s largest lender SBI and private sector major ICICI Bank were classified as D-SIBs in 2015.
With the inclusion of HDFC Bank in the list, there will now be three ‘too big to fail’ financial entities in the country.
SIBs are subjected to higher levels of supervision so as to prevent disruption in financial services in the event of any failure.
“The additional Common Equity Tier 1 requirement for D-SIBs has already been phased-in from April 1, 2016, and will become fully effective from April 1, 2019,” the RBI said.