Too big to fail: RBI increases capital buffer for SBI, HDFC
Thursday, 28 December 2023
The RBI has increased the capital requirements for SBI and HDFC Bank under its guidelines for systemically important banks as it sees higher contagion risks. The need for a higher capital buffer comes at a time when the central bank analysed how problems in one bank could affect others in its financial stability report. The report shows that if the most critical bank were to fail, it would now affect 3.6% of all banksβ tier-1 capital, up from 2.2% in March 2023.
The RBI has increased the capital requirements for SBI and HDFC Bank under its guidelines for systemically important banks as it sees higher contagion risks. The need for a higher capital buffer comes at a time when the central bank analysed how problems in one bank could affect others in its financial stability report. The report shows that if the most critical bank were to fail, it would now affect 3.6% of all banksβ tier-1 capital, up from 2.2% in March 2023.
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