The Reserve Bank of India (RBI) has updated its capital adequacy framework to match Basel Committee on Banking Supervision (BCBS) standards, with revised leverage ratio rules taking effect on 1 April 2027. Domestic Systemically Important Banks (D-SIBs) must hold a minimum leverage ratio of 4%, and other banks 3.5%, at all times. The ratio compares a bank's core capital with its total exposure, covering on-balance-sheet assets, derivatives and off-balance-sheet commitments, without weighting assets by risk. It works as a backstop to risk-weighted capital rules to make balance sheets more resilient. The RBI turned down banks' plea for extra time to comply.
