Amid growing concerns among depositors over the safety of their savings in banks, the Reserve Bank of India (RBI) has released a list of the safest banks in the country. These banks are classified as Domestic Systemically Important Banks (D-SIBs) — institutions so crucial to India’s financial stability that the government is unlikely to let them fail.
The list includes:
- State Bank of India (SBI) – Government sector
- HDFC Bank – Private sector
- ICICI Bank – Private sector
This classification assures depositors that their money in these banks is secure, and the institutions themselves are structurally robust and closely monitored.
FCRF x CERT-In Roll Out National Cyber Crisis Management Course to Prepare India’s Digital Defenders
Why SBI, HDFC & ICICI Are Classified as Systemically Important
According to the RBI, Domestic Systemically Important Banks (D-SIBs) are institutions whose failure could severely impact the entire financial system. These banks are considered “too big to fail” because they play a critical role in economic operations and financial intermediation.
The D-SIB classification imposes stricter regulatory oversight, higher capital requirements, and ongoing stress testing for these banks. The government and RBI closely monitor their activities, balance sheets, and exposure to risk.
As a result, customers banking with these institutions benefit from an extra layer of protection, making their deposits safer compared to smaller or lesser-regulated banks.
“The failure of any of these banks could destabilize the country’s financial ecosystem. Therefore, their regulation and supervision are exceptionally rigorous,” said a senior RBI official.
What Happens If a Bank Fails? DICGC to Cover Deposits up to ₹5 Lakh
While the D-SIBs offer strong safety assurances, customers should also understand the rules governing deposit insurance in case of bank failures.
As per current guidelines:
- The Deposit Insurance and Credit Guarantee Corporation (DICGC) provides insurance cover of up to ₹5 lakh per depositor per bank.
- This includes principal + interest, across all accounts held in the same bank.
- Multiple accounts in the same bank are considered as one for the insurance cap.
- If a depositor holds accounts in different banks, the ₹5 lakh insurance applies separately to each bank.
Algoritha: The Most Trusted Name in BFSI Investigations and DFIR Services
The legal basis for this provision comes from Section 16(1) of the DICGC Act, 1961, which caps deposit insurance liability at ₹5 lakh. This limit applies regardless of the actual balance, which means any amount exceeding ₹5 lakh is not covered and could be lost if the bank collapses.
How to Stay Financially Protected: Diversify Deposits Across Banks
To minimize risk, financial experts recommend diversifying your deposits across multiple banks, especially when the amount exceeds ₹5 lakh. Spreading funds across institutions ensures that each account gets separate DICGC coverage.
Many cautious depositors maintain multiple accounts across D-SIBs, considering their added regulatory oversight and critical importance in India’s banking landscape.