What are systemically important banks (SIBs)? Check list of all domestic and global SIBs

On March 19, HDFC Bank, India’s largest private sector lender, informed exchanges of the sudden resignation of its non-executive chairman, Atanu Chakraborty, who resigned on March 18, citing differences over “values and ethics".

In his resignation letter dated March 17, Chakraborty said certain developments and practices within the bank over the past two years were “not in congruence” with his personal values. HDFC Bank, in a regulatory filing, said the resignation was received on March 18 and was effective immediately.

The development weighed heavily on investor sentiment, given HDFC Bank’s dominant weight in the NIFTY Bank and its significant presence in the NIFTY 50. Internal concerns at a bank of such stature made investors cautious, especially considering its substantial ownership by FIIs and mutual funds.

However, following the development, the Reserve Bank of India (RBI) on March 19 clarified that it approved the transition arrangement for the position of part-time chairman as requested by the bank.

The apex bank further said that HDFC Bank, which is a domestic systemically important bank (D-SIB), has sound financials, a professionally run board, and a competent management team.

“Based on our periodical assessment, there are no material concerns on record as regards its conduct or governance,” the central bank added.

That said, here is a look at what SIBs are and why they are important for any economy.

What are systemically important banks (SIBs)?

Systemically important banks (SIBs) are banks whose failure or distress could have a ripple effect on the broader economy and financial market.

These banks, perceived to be too big to fail (TBTF), are of systemic importance to the economy due to their size, cross-jurisdictional activities, complexity, and interconnectedness to other institutions. In India, the Reserve Bank of India (RBI) has classified three banks, the State Bank of India (SBI), ICICI Bank, and HDFC Bank, as domestic systemically important banks (D-SIBs).

The apex bank had classified SBI and ICICI Bank as D-SIBs in 2015 and 2016, respectively, and added HDFC Bank to the list in 2017.

The D-SIBs are classified into five buckets based on their systemic importance score, ranging from one to five. Bucket 1 represents the lowest importance, while bucket 5 marks the highest risk.

Here is the RBI’s latest classification of D-SIBs:

Data: RBI, Dec 2, 2025

D-SIBs are subjected to additional common equity requirements based on the bucket they’re placed in.

For instance, SBI, the country’s largest public sector lender, has an additional common equity tier 1 (CET1) requirement of 0.8%. Furthermore, HDFC and ICICI Bank have additional requirements of 0.4% and 0.2%, respectively.

Common equity tier 1 (CET1), a capital measure introduced in 2014, is the highest quality capital a bank can hold, comprising ordinary shares and retained earnings. It serves as a cushion for supporting financial stability.

What are G-SIBs?

Global systemically important banks (G-SIBs) are institutions whose failure could trigger a major global financial crisis.

Every year, the Financial Stability Board (FSB), in collaboration with the Basel Committee on Banking Supervision (BCBS), evaluates large, global banks for G-SIB designation.

Similar to the D-SIB, G-SIBs are classified, as per their score, into five buckets. Banks in bucket 1 are of lower risk, and those in bucket 5 are the highest risk. Simply put, the higher a bank’s score is, the greater the potential impact its failure might have on the global financial system.

Banks designated as G-SIBs are required to hold a higher capital buffer, meet the total loss-absorbing capacity (TLAC) standard, and have higher supervisory expectations, among other requirements.

The FSB identifies 29 banks as G-SIBs, according to its latest publication dated November 27, 2025.

Here is a list of all the G-SIBs:

Source: Financial Stability Board, Nov 27, 2025

According to BCBS’s ten-year assessment report, over the past decade, while ultra-big banks have become larger, their G-SIB scores have fallen slightly since 2021, caused by a decrease in their interconnectedness and complexity.

Why was the SIB framework implemented?

The framework for systemically important banks was set up in the aftermath of the 2008 financial crisis, when the failure of several large banks sent ripples not only through the global financial ecosystem but also the real economy.

The FSB began identifying G-SIBs in November 2011, with the RBI enacting the D-SIB framework in July 2014.