According to the SBP, in line with D-SIBs framework, the State Bank has carried out the annual assessment on the basis of financials of end-December 2018. As per this assessment, three banks viz Habib Bank Ltd, National Bank of Pakistan, and United Bank Ltd have been designated as D-SIBs for the year 2019. Now, these banks will be subject to enhanced supervisory requirements and following higher capital surcharge in the form of additional common equity tier-1 capital (CET-1) with effect from March 31, 2020.
The framework introduced by the State Bank is consistent with the international standards and practices and takes into account the local dynamics. It specifies the methodology for the identification and designation of D-SIBs, enhanced regulatory and supervisory requirements, and implementation guidelines. These enhanced requirements aim to further strengthen the resilience of the Systemically Important banks against shocks and augment their risk management capacities.
The identification of D-SIBs involves two-step process. In the first step, sample banks are identified each year based on the quantitative and qualitative criteria. In the second step, D-SIBs are designated from among the sample banks on the basis of institutions'' systemic score in terms of their size, interconnectedness, substitutability, and complexity.
In addition, branches of Global-Systemically Important Banks (G-SIBs) operating in Pakistan will hold additional CET1 capital against their risk-weighted assets in Pakistan at the rate as applicable on the respective principal G-SIB.