Hi,
I am confused about what to do now.
Do i have to configure anything else in /etc/pam.d apart from system-auth?
IMO, you have to configure sssd.conf properly.
Please add "ldap_user_authorized_host = host" in your sssd.conf which you have not configured. After that please check again.
For more information, please refer below link.
https://lists.fedorahosted.org/pipermail/sssd-users/2015-May/003001.html
--Regards Ashishkumar S. Yadav