Why is it in the news?

• The Financial Stability Board (FSB) has released its 2023 list of Global Systemically Important Banks (G-SIBs), identifying key institutions crucial to global financial stability, with implications for enhanced regulatory oversight.
• No Indian bank is included in the G-SIBs list.

About G-SIB

• A bank whose systemic risk profile is so significant that its failure could trigger a broader financial crisis and jeopardize the global economy.
• Placed in five buckets, each corresponding to required levels of additional capital buffers.

Selection Criteria for G-SIBs

• G-SIBs are required to maintain a higher capital buffer.
• The bank’s ability to absorb losses.
• Assessing the ease with which the bank can be resolved in case of failure.
• Meeting elevated supervisory standards.

Domestic Systemically Important Banks (D-SIBs)

• Framework for D-SIBs introduced in 2014 by the Reserve Bank of India (RBI).
• Similar to G-SIBs, D-SIBs in India are categorized into five different buckets.
• SBI falls under Bucket 3, while ICICI Bank and HDFC Bank are listed as D-SIBs in Bucket 1.
• D-SIBs are required to maintain additional CET1 requirements ranging from 0.20% to 0.80% of RWA.