ICC Chief Executive David Richardson laid the charge against Smith under to Article 2.2.1 of the ICC Code of Conduct for Players and Player Support Personnel which prohibits to 'all types of conduct of a serious nature that is contrary to the spirit of the game'.
Smith accepted the charge and the proposed sanction of two suspension points which equates to a ban for the next Test match and which will see four demerit points added to his record.
Richardson said: "The decision made by the leadership group of the Australian team to act in this way is clearly contrary to the spirit of the game, risks causing significant damage to the integrity of the match, the players and the sport itself and is therefore 'serious' in nature.
"As captain, Steve Smith must take full responsibility for the actions of his players and it is appropriate that he be suspended."
Smith, who has established himself as the world's premier Test batsman, has also often attracted attention for occasional serious lapses of judgement.
Richardson said, "The game needs to have a hard look at itself. In recent weeks we have seen incidents of ugly sledging, send-offs, dissent against umpires' decisions, a walk-off, ball tampering and some ordinary off-field behaviour.
"The ICC needs to do more to prevent poor behaviour and better police the spirit of the game, defining more clearly what is expected of players and enforcing the regulations in a consistent fashion."
The former South Africa
stumper has called on the member nations to uphold the spirit of the game.
"In addition and most importantly Member countries need to show more accountability for their teams' conduct. Winning is important but not at the expense of the spirit of the game which is intrinsic and precious to the sport of cricket. We have to raise the bar across all areas."
Bancroft admitted that he breached Article 2.2.9 of the ICC Code of Conduct for Players and Player Support Personnel, which relates to "changing the condition of the ball in breach of clause 41.3." and accepted the sanction proposed by Andy Pycroft of the Elite Panel of ICC Match Referees, and as such there was no need for a formal hearing.
The incident that led to the charges being laid took place during South Africa's innings yesterday afternoon when Bancroft was seen on television holding a foreign object while rubbing the ball, before hiding the object in his pocket, then inside his trousers.
As soon as the incident was shown on the giant screen, the player was questioned in the presence of his captain Smith by the two on-field umpires, Richard Illingworth and Nigel Llong, who, along with third umpire Ian Gould and fourth umpire Allahudien Palekar, later charged Bancroft.
The umpires inspected the ball at that time and decided not to replace the ball and award a five-run penalty as they could not see any marks on the ball that suggested that its condition had been changed as a direct result of Bancroft's actions.
The umpires though agreed that Bancroft's actions were likely to alter the condition of the ball and he was therefore charged under Article 2.2.9.
Commenting on his decision, Pycroft said: "To carry a foreign object on to the field of play with the intention of changing the condition of the ball to gain an unfair advantage over your opponent is against not only the Laws, but the Spirit of the game as well.
"That said, I acknowledge that Cameron has accepted responsibility for his actions by pleading guilty to the charge and apologising publicly.
"As a young player starting out in international cricket, I hope the lessons learned from this episode will strongly influence the way he plays the game during the rest of his career."
All Level 2 breaches carry a minimum penalty of a fine of between 50-100 per cent of the applicable match fee and/or up to two suspension points.