KARACHI: The State Bank of Pakistan (SBP) has designated three local banks as
Domestic Systemically Important Banks (D-SIBs) for 2024. These included National Bank of Pakistan (NBP), United Bank Limited (UBL) and Habib Bank Limited. The State Bank of Pakistan has announced the designation of D-SIBs for the year 2024 under the
Framework for ‘Domestic Systemically Important Banks (D-SIBs)’ notified in April 2018.
The framework introduced by State Bank is consistent with international standards and takes into
account global best practices and local dynamics. It specifies the methodology for the identification
and designation of D-SIBs, enhanced regulatory and supervisory requirements and implementation
guidelines for D-SIBs. The enhanced requirements aim to further strengthen the resilience of the
systemically important banks against shocks and further augment their risk management capacities.
The identification of D-SIBs involves two-step process. In the first step, sample D-SIBs are identified
each year based on the quantitative and qualitative criteria. In the second step, D-SIBs are designated
from amongst the sample D-SIBs based on institutions’ composite systemic score in terms of their size,
interconnectedness, substitutability and complexity.
In line with D-SIBs framework, State Bank has carried out the annual assessment based on banks’
financials as of December 31, 2023. As per the assessment, three banks namely National Bank of
Pakistan, United Bank Limited, and Habib Bank Limited have been designated as D-SIBs for the year
2024. These banks will have to follow additional Common Equity Tier-1 (CET-1) capital requirements,
in addition to implementing the enhanced supervisory requirements:
BUCKET Name of Institution Additional CET-1 Requirement
for Bucket besides, branches of Global-Systemically Important Banks (G-SIBs) operating in Pakistan will be
required to hold additional CET-1 capital against their risk-weighted assets in Pakistan at the rate as
applicable on the respective principal G-SIB.