Safest Banks of India: Many of us open bank accounts so that our money remains safe and we earn huge income from the interest received on it. After depositing money in the bank, we become tension free thinking that now our money is secure, but there is no assurance of when the bank goes bankrupt and when your money is lost. In such a situation, if you want to keep your money safe, then this is useful news for you.
Three safest banks of the country
In fact, the Reserve Bank of India (RBI) has declared State Bank of India (SBI), HDFC Bank and ICICI Bank as the safest banks in the country. RBI has identified them as the most systemically important financial institutions of the country and described them as Domestic Systemically Important Banks (D-SIBs). With this announcement by RBI on Tuesday, it has now been confirmed that all these three institutions hold an important place in the banking sector.
Their safety is very important
These banks were identified as D-SIBs in 2024, which are once again ahead due to their size and importance for the country’s economy. D-SIBs are considered so important that their failure has a very bad impact on the financial system of the country, which can cause large-scale problems, hence the government and the regulator are committed to ensuring their stability and steps have been taken to prevent them from failing.
It is necessary to maintain extra capital
According to RBI guidelines, these banks included in the high bucket category need to keep more capital with themselves. Specifically, Extra Common Equity Tier 1 (CET1) capital. So that it can help in facing any possible loss or risk.
The level of additional CET1 capital varies depending on the classification of the bank in the D-SIB framework. State Bank of India has been placed in Bucket 4, for which it will have to maintain additional 0.80 percent CET1 capital. HDFC Bank is in Bucket 2, which requires an additional 0.40 percent CET1 capital. ICICI Bank is in Bucket 1, for which it will have to maintain additional 0.20 percent CET1 capital.
What are D-SIBs?
The concept of Domestic Systemically Important Banks was first introduced in 2014. This was a part of RBI’s efforts to strengthen financial stability. Their identification started in 2015. Domestic Systemically Important Banks are those banks which play an important role in the economy. If something goes wrong in this, the entire system of the country can be shaken, hence the government keeps a close watch on them and comes to the forefront to save them from the trouble.
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