After SBI, ICICI and HDFC Bank, the Reserve Bank of India is now planning to include many more banks in its list of full-fledged banks. Business Standard has quoted sources as saying that the financial situation of many banks has improved after the bank merger. In such a situation, the domestic systematic bank ie D-SIBs can be reconsidered. This issue has been raised in the meeting of the Supervisory Department of the Central Bank, although the agenda note has not been prepared yet.
Talking about asset size, the assets of SBI and HDFC Bank are at the first and second position. After that comes the number of Bank of Baroda, Punjab National Bank and Canara Bank. ICICI Bank has slipped and has now reached the sixth position. It is believed that now Bank of Baroda, PNB and Canara Bank can be included in the list of trusted bank of Reserve Bank. In the Reserve Bank of 2014 guidelines, it has been clearly stated that every three years, the central bank will identify the systemic importance of banks. On January 21, SBI, ICICI and HDFC Bank were identified in this connection.
These banks are important for the economy of the country
According to the circular of the Reserve Bank, there is no compulsory number in the D-SIBs category of domestic systematic import. The Reserve Bank had said that keeping in mind the different categories, 4-6 banks can be included in this list. In the systemically important bank category, there are those banks which are very important for the economy of the country. They are very important for the government and the system.
Reserve Bank has special eye
In other words, the banks that are included in this list have a special eye on the banks. This is because they are associated with systemic risk as well as moral risk. If there is any irregularity in such banks, then it affects the system. Apart from this, if their financial condition is hurt then its consequences can be very serious. Similarly, Global Systemically Important Banks (G-SIBs) were started in 2011.
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