India cenbank names SBI, ICICI as 'systemically important' lenders

India's central bank listed State Bank of India and ICICI Bank as the country's two "systemically important banks", lining them up for tougher supervision to avoid collapses that would rattle the financial system and economy. 

PHOTO: ICICI BANK

AUG 31, 20159:36 PM

[MUMBAI] India's central bank listed State Bank of India and ICICI Bank as the country's two "systemically important banks", lining them up for tougher supervision to avoid collapses that would rattle the financial system and economy.

The designation by the Reserve Bank of India (RBI) on Monday is the rough equivalent of the "too big to fail" applied to lenders in other countries, including the United States.

The RBI said State Bank of India would now need to set aside an additional Tier 1 common equity of 0.6 per cent of its risk-weighted assets. ICICI Bank will have to maintain an additional 0.2 per cent.

The RBI said it will review its list of systemically important banks every year and announce them in August.

REUTERS