ICICI Bank Current Affairs - 2019

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SBI, ICICI, HDFC Bank to remain D-SIBs

The Reserve Bank of India (RBI) has announced that SBI, ICICI and HDFC Banks would continue as Domestic Systemically Important Banks (D-SIBs) for 2018.

D-SIBs

  • The recognition as Domestic Systemically Important Banks (D-SIBs) implies that banks are too big to fail. This creates an expectation of government support for them in times of financial distress.
  • As a result, banks enjoy certain advantages in funding markets. Inclusion in the list gives additional comfort to investors that these banks won’t be allowed to fail and therefore, borrowing costs of these banks from the markets are cheaper than their peers.
  • Inclusion in D-SIB also implies that the failure of any of these banks would have a cascading effect on the Indian financial system.
  • These D-SIBs are required to maintain an additional common equity requirement based on the bucket in which a D-SIB is placed.
  • SBI in the third bucket was setting aside 0.45 per cent of its assets as an additional capital requirement and have to set aside 0.60 per cent of its risk-weighted assets.
  • ICICI Bank and HDFC which are in the fifth bucket are required to set aside 0.20 per cent Bank’s capital requirement from 0.15 per cent now.

RBI had initiated the recognition as D-SIBs from 2015 and places these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs).

Month: Categories: Business, Economy & BankingUPSC

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ICICI Bank becomes first Indian bank to go live on SWIFT’s GPI service

India’s largest private sector lender ICICI Bank became first Indian bank to go live on SWIFT’s (Society for World Interbank Financial Telecommunication System) Global Payment Innovation (GPI), an improved cross-border payments service.

SWFIT GPI

SWFIT GPI was launched in May 2017 to help banks to track their global transactions at all times, keeping full vigil on payments activity. It covers all payment instructions sent across network, enabling GPI banks to track all their SWIFT payment instructions at all times, and giving them full visibility over all their payments activity. It accounts for 10% of cross border payment traffic on SWIFT network and has enabled more than hundred billion dollars to be transferred across world rapidly and securely every day.

Benefits

It improves customer experience by increasing speed, transparency and automatically provides status updates to all GPI banks involved in any GPI payment chain. It allows banks to confirm when payment has been completed. It facilitates more accurate reconciliation of payments and invoices, optimises liquidity with improved cash forecasts and reduces exposure to Foreign exchange risk, with same-day processing of funds in beneficiaries’ time zones.

SWIFT (Society for World Interbank Financial Telecommunication System)

SWIFT is global financial messaging service that enables financial institutions worldwide to send and receive information about financial transactions in secure, standardized and reliable environment. It is used to transmit messages relating to cross border financial transactions. It was founded in 1973 and is headquartered in La Hulpe, Belgium.

Month: Categories: Business, Economy & Banking

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