Economy News

Revision of Leverage Framework

October 28 , 2026 15 hrs 0 min 33 0

The Reserve Bank of India (RBI) revised its capital adequacy framework to align with Basel Committee on Banking Supervision (BCBS) standards, with new leverage ratio rules effective from 1 April 2027.
The minimum leverage ratio is set at 4% for Domestic Systemically Important Banks (D-SIBs) and 3.5% for other banks.
The leverage ratio measures a bank’s core capital against total exposure, without considering the riskiness of assets.
Banks must maintain the minimum ratio at all times, with exposure including on-balance-sheet assets, derivatives and off-balance-sheet commitments.
The framework acts as a backstop to risk-weighted capital requirements and aims to strengthen banks’ balance-sheet resilience.
The RBI rejected banks’ request for additional time to implement the revised framework.