State Bank of India (SBI) has significantly strengthened its capital position over the last ten years, providing a strong foundation for business growth and financial stability. The bank’s Tier I Capital increased from ₹1.62 lakh crore in 2016-17 to ₹5.28 lakh crore in 2025-26, while Tier II Capital rose from ₹43,087 crore to ₹82,088 crore during the same period. The Tier I Capital Ratio also improved from 10.35% to 13.33%, reflecting SBI’s enhanced ability to absorb risks and support future lending growth. The steady increase in capital levels highlights the bank’s strong financial health and compliance with regulatory capital requirements.
What is Tier 1 and Tier 2 capital?
Understand with the help of an example:
Suppose you lose your mobile worth Rs.30,000. You have Rs.50,000 in your savings account, so you can absorb this loss. This is the Tier 1 capital. This capital belongs to you entirely. But suppose you don’t have money in your savings account and you borrow Rs.30,000 from your friend. This is the Tier 2 capital.
- Your savings account balance = Tier I Capital
- Money borrowed from friends for emergencies = Tier II Capital
Your own savings are more reliable than borrowed money. Similarly, Tier I Capital is stronger than Tier II Capital.
Tier I Capital and Tier II Capital are important measures of a bank’s financial strength. Tier I Capital is the bank’s core capital and includes equity capital, reserves and retained earnings. It is the primary source of funds that can absorb losses while allowing the bank to continue its normal operations. Because of this, Tier I Capital is considered the strongest and most important form of capital.
Tier II Capital is supplementary capital and includes items such as subordinated debt, revaluation reserves and certain provisions. Although it can also help absorb losses, it is considered less secure than Tier I Capital. Together, Tier I and Tier II Capital act as a financial cushion that protects depositors and helps banks remain stable during difficult periods. A higher level of capital indicates a stronger and more financially secure bank with greater capacity to support lending and business growth.
SBI Tier 1 and Tier 2 Capital
| Financial Year | Tier I Capital (₹ Crore) | Tier I Capital Ratio (%) |
|---|---|---|
| 2016-17 | 1,61,644 | 10.35 |
| 2017-18 | 1,95,820 | 10.36 |
| 2018-19 | 2,05,238 | 10.65 |
| 2019-20 | 2,30,769 | 11.00 |
| 2020-21 | 2,57,177 | 11.44 |
| 2021-22 | 2,83,070 | 11.42 |
| 2022-23 | 3,35,528 | 12.06 |
| 2023-24 | 3,84,177 | 11.93 |
| 2024-25 | 4,41,970 | 12.11 |
| 2025-26 | 5,27,992 | 13.33 |
| Financial Year | Tier II Capital (₹ Crore) | Tier II Capital Ratio (%) |
|---|---|---|
| 2016-17 | 43,087 | 2.76 |
| 2017-18 | 42,334 | 2.24 |
| 2018-19 | 39,987 | 2.07 |
| 2019-20 | 43,267 | 2.06 |
| 2020-21 | 51,716 | 2.30 |
| 2021-22 | 59,722 | 2.41 |
| 2022-23 | 73,051 | 2.62 |
| 2023-24 | 75,846 | 2.35 |
| 2024-25 | 78,092 | 2.14 |
| 2025-26 | 82,088 | 2.07 |
Growth Over 10 Years
| Particulars | 2016-17 | 2025-26 | Increase |
|---|---|---|---|
| Tier I Capital (₹ Crore) | 1,61,644 | 5,27,992 | +227% |
| Tier II Capital (₹ Crore) | 43,087 | 82,088 | +90% |
| Tier I Capital Ratio | 10.35% | 13.33% | +2.98 percentage points |
| Tier II Capital Ratio | 2.76% | 2.07% | -0.69 percentage points |
Key Highlights
- SBI’s Tier I Capital increased from ₹1.62 lakh crore in 2016-17 to ₹5.28 lakh crore in 2025-26.
- The Tier I Capital Ratio improved from 10.35% to 13.33%, indicating stronger capital strength.
- Tier II Capital increased from ₹43,087 crore to ₹82,088 crore during the same period.
- The data shows a significant strengthening of SBI’s capital base, helping the bank support higher lending growth while maintaining regulatory capital requirements.
